05 September 2023

RBNZ and FMA Governance Thematic Review outlines good practices and areas for improvement

A cross-sector thematic review of regulated entities’ governance practices by the Reserve Bank of New Zealand (RBNZ) – Te Pūtea Matua and the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko has highlighted the need for boards to be focused on continuous improvement to ensure future success.  

The Governance Thematic Review assessed the foundational elements of good governance by reviewing the policies, processes and practices of boards of regulated entities. This included assessment against legislative requirements, RBNZ and FMA guidance, as well as local and international guidance on good governance practices.  

RBNZ Deputy Governor Christian Hawkesby says history has shown that good governance - particularly around the core accountabilities of organisational strategy, culture and risk management - is critical to the success of financial institutions and the stability of the system as a whole. 

"We therefore all rely on boards to provide effective direction, oversight and governance," Mr Hawkesby says. 

“We observed a variety of governance practices across entities, which is why the report shares examples of good practice that others can learn from.“ 

A sample of 29 entities regulated by the RBNZ and/or the FMA across the banking, insurance, non-bank deposit taking and investment management sectors participated in the review 

FMA Executive Director Regulatory Delivery Clare Bolingford thanked the boards and executive teams for their engagement and participation in this review. 

"There is real value in maintaining an open and collaborative approach to support continuous improvement," Ms Bolingford says. 

“The report shows how and where boards have built the foundational elements for good governance practices and effective oversight. Establishing and maintaining these is fundamental. It supports boards in moving to a more comprehensive focus, combining robust governance frameworks, board behaviours and culture to deliver for customers, shareholders and all their stakeholders.” 

Individual feedback has been provided to participating entities and we will be engaging with these entities to support the recommended changes.   

We encourage boards of regulated entities who did not participate in the review to assess their governance arrangements against our expectations and adopt good practices outlined in this report. We will also be considering these findings in upcoming policy reviews. 

Download the Governance Thematic Review, PDF 881KB


More information 



What are thematic reviews? 

What were the objectives of the governance thematic review? 

  • 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. 
    • Promote effective board practices by outlining areas of good practice that all boards should consider, clarifying our expectations and highlighting areas for improvement.  

What legislation and guidance were referred to for the review? 

  • A full list of the legislation and guidance referred to is published in Appendix 2 of the governance thematic review report. This includes RBNZ, FMA, Basel Committee on Banking Supervision, Australian Prudential Regulation Authority and Federal Reserve legislation and guidance. The findings of the review now supplement existing guidance. 

Which entities participated in the review?  

  • We reviewed a sample of 29 entities regulated by the RBNZ and/or the FMA, across the banking, insurance, non-bank deposit taking and investment management sectors. 

What were the entities and how did they perform? 

  • The sample for this thematic review is kept confidential. Individual feedback is shared confidentially with participating entities and a summary of key thematic findings is published in our review report. 

How was the review carried out? 

  • 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.  

What are the next steps following the review? 

  • We have provided specific detailed feedback to individual entities that participated in the review, outlining 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 (IPSA). A review of the FMA Corporate Governance Handbook may be undertaken once the relevant RBNZ policy has been finalised. 

What powers does RBNZ have to enforce the recommendations? 

  • We will work with regulated entities to develop an action plan that will appropriately address the findings from the review.  
  • Our powers differ for different sectors based on the legislation that applies to them.  

How does the RBNZ board perform in respect of the thematic review expectations? 

  • RBNZ governance has gone through a significant change and refresh recently, with a new Board and governance arrangements in place since July 2022. Under these arrangements our Board of Directors looks much more like a standard corporate board, although a number of key activities are prescribed by legislation. Our Board members - Reserve Bank of New Zealand - Te Pūtea Matua (rbnz.govt.nz). 
  • Our Board will be reflecting on the review findings in relation to their own practices.  

What other thematic reviews are planned? 

  • We have not decided on our next thematic review topic yet. We will go through our internal processes to determine the next topic, which will be aligned with our strategic priorities and financial stability objectives. 


Media contact

RBNZ media contact
Donna Freebairn 
Senior Adviser, External Stakeholders 
Mobile: 020 41 664411 
Email: [email protected] 

FMA media contact 
Andrew Park 
Manager, External Communications 
DDI: +64 21 220 6770 
Email:[email protected]