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Cross-sector thematic review on governance

The Reserve Bank of New Zealand (RBNZ) - Te Pūtea Matua and the Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko jointly conducted a cross-sector thematic review on governance.

Governance Thematic Review report

In September 2023, we published a report with the key thematic findings from our Governance Thematic Review.

The report has been independently reviewed by Dr John Laker, former Chairman of the Australian Prudential Regulation Authority (APRA).

Read Dr John Laker's biography on The University of Melbourne website

What the review found

We observed a variety of governance practices in this review. There were many good practices and practices that were below our expectations. Most entities still need improvement to ensure robust and comprehensive governance frameworks, policies and processes are in place. 

Some particularly good practices we saw across the sample of entities included:

  • Formal and clear processes for planning and formulating strategy.
  • Strong processes for selecting and appointing new directors and the CEO.
  • Boards are composed of a majority of independent directors.
  • Clearly documented succession planning for CEOs and senior management.
  • Formal standalone conflict of interest policies.
  • Formal annual planning processes and work plans for the board and committees.
  • Regular education sessions for the board, including in-depth sessions on specific risk topics.

Some of the key areas for improvement across the sample of entities included:

  • The process for selecting and appointing the board chair and committee members was not robust.
  • Formal frameworks to assess ongoing board training needs were generally absent.
  • Succession planning for the board was not as formal and rigorous as we expected. 
  • Diversity policies did not apply to the board.
  • Capacity of directors was not assessed in a consistent and robust manner.
  • Internal board performance evaluations were inadequate and most entities did not undertake an independent evaluation of board performance.

Next steps

We gave specific feedback to entities involved in the review before we released the review report. This feedback outlined our observations and recommendations.

Our supervision team will work with regulated entities on their individual findings and action plans.

We are encouraging boards of regulated entities that were not part of this review to assess their governance arrangements against the principles, expectations and good practices outlined in the Governance Thematic Review report. Boards should discuss the outcome of the self-assessment, including which practices they are working towards implementing or have implemented.

We will also be considering the findings from this review in upcoming policy reviews such as the Standards development for the Deposit Takers Act and review of the Insurance (Prudential Supervision) Act 2010

Governance Thematic Webinar

Non-participating regulated entities were invited to attend a webinar on the Governance Thematic Review on 30 October 2023. The webinar was hosted by the Reserve Bank of New Zealand – Te Pūtea Matua and the Financial Markets Authority - Te Mana Tatai Hokohoko. The presentation slides, updated to include a summary of the Q&A session, are available here.

RBNZ and FMA Governance Thematic Review webinar presentation slides (PDF 453KB)

About the review

The RBNZ and FMA expect regulated entities to have effective governance arrangements to support boards in their crucial role. Such arrangements enable boards to make well-informed decisions, based on sound judgement and in the best interest of the entity, its customers, and its key stakeholders. These expectations are outlined in more detail in our respective governance requirements and guidance, which are now supplemented by this report. 

As this is our first joint thematic review of governance across New Zealand’s financial sector, our focus is the foundational elements of governance, which includes frameworks, policies and processes necessary to assist boards to meet their obligations and help drive good governance outcomes.


The review focused on the foundational elements of governance frameworks, policies and processes to:

  • determine the extent to which these aligned to our regulatory requirements and guidance
  • understand how these allow boards to provide effective oversight, and
  • promote effective board practices by outlining areas of good practice that all boards should consider, clarifying our expectations and highlighting areas for improvement. 

Entities involved in the review

We reviewed a sample of 29 entities regulated by the RBNZ and/or the FMA from across 4 sectors:

  • banking
  • insurance
  • non-bank deposit taking, and
  • investment management sectors.

These were selected so the sample is representative across the different sectors. The RBNZ and FMA will keep the sample confidential.

Approach to the review

For each entity, we reviewed a range of documents related to board and governance policies, procedures and record keeping. 

This was followed up with in-depth onsite reviews where we interviewed board members and executive management. 

We assessed the entities against our expectations for governance, as set out in relevant legislation, regulatory requirements (for example Conditions of Registration or Licensing) and RBNZ and FMA guidance. Where we do not have guidance on a specific area, we considered other local and international guidance to determine good practice. 


Fazeena Hussain
Manager, Stress Testing and Thematics, RBNZ
Email: [email protected]

Charis Danieli
Senior Adviser, Supervision, FMA
Email: [email protected]