Fix your conduct culture, the FMA told banks. Now fix your own.

Two leadership blows in three months

The Financial Markets Authority is the body that tells New Zealand’s banks, insurers and fund managers to fix their conduct and culture. It is now doing exactly that to itself, from a position of unusual weakness.

On 30 July 2026, the FMA announced that Chief Executive Samantha Barrass had gone on leave, with board member Alastair Hercus stepping in as interim CEO. Acting Board Chair Steve Bardy said the board “has recently become aware of cultural concerns at the FMA and is assessing the matters raised as a matter of urgency,” according to RNZ. The move followed a Stuff report airing allegations from multiple former employees about the regulator’s workplace culture.

Barrass had already signalled in May 2026 that she would not seek reappointment when her five-year term ends in January 2027. But her stepping aside now, mid-review, is the second major leadership rupture at the regulator in under three months.

The chair went first

In May 2026, FMA Chair Craig Stobo resigned following an independent review led by Wendy Aldred KC and commissioned by MBIE. The review cleared Stobo of the most serious allegations, but the 45-page report found that aspects of his public commentary breached the standards of political neutrality expected of the head of an independent regulator.

The report focused in particular on a submission Stobo made to Parliament on the Treaty Principles Bill, described as laudatory of the coalition government and critical of the opposition, a breach of the Public Service Commission’s code of political impartiality. Stobo had temporarily stood aside in December 2025, and Bardy has been acting chair ever since, now more than seven months.

The warning that went unanswered

The leadership churn is not the real story. The more damning thread is that someone inside the FMA raised the culture alarm months ago, and nothing visible happened.

When the Stobo review concluded in May 2026, former FMA senior adviser Kyla Bottriell stated that she had “raised legitimate concerns through proper channels about the FMA’s internal culture, rumour-spreading, lack of accountability and leaking of internal matters,” adding that “those concerns predate this investigation and remain unaddressed.”

Bottriell called for an independent review of conduct and culture at the regulator. That call sat unanswered for nearly three months until Stuff’s reporting forced the board’s hand. The NZ Herald reported that concerns had been circulating for some time, with staff describing bullying allegations and poor handling of internal complaints. A regulator that demands whistleblower protections and prompt escalation from the firms it supervises appears to have struggled with both in-house.

Who is actually steering the ship

Strip it back and the FMA currently has no permanent chair, no active chief executive, and a confirmed CEO vacancy from January 2027 regardless of what the culture review finds. Both top jobs are being held by stand-ins.

That is not just an optics problem for the sector under supervision. Enforcement actions, regulatory guidance and supervisory priorities are all set by leadership. For banks, insurers, fund managers and listed companies, the practical question is who owns the regulatory agenda during a transition this deep, and with what mandate to make consequential calls.

The timing sharpens the issue. The FMA has been signalling a shift toward engagement over enforcement as it absorbs new consumer finance responsibilities. Whether that direction holds under interim leadership, or drifts, is anyone’s guess. Regulated firms hate uncertainty about enforcement appetite, and right now that is exactly what they have.

Credibility is the currency

The FMA’s authority to run conduct and culture reviews of the banking and insurance sectors rested on a simple premise, that the assessment came from a credible, well-governed external body. That premise takes a hit when the assessor is itself under an urgent cultural review with a leadership vacuum at the top.

Commerce and Consumer Affairs Minister Cameron Brewer already had a permanent chair appointment process running. He now has a parallel CEO succession to manage, over an institution being investigated over its own conduct. The test for the sector is whether the internal review delivers substantive change or becomes another governance exercise that leaves the underlying problems in place, precisely the criticism Bottriell levelled at the FMA the first time round.

Sources

• FMA chief on leave amid urgent review of ‘cultural concerns’ (2026-07-30)
• Chair of Financial Markets Authority resigns after conduct review (2026-05-04)
• Stobo gone from FMA as MBIE report finds political ‘neutrality’ breach (2026-05-04)
• Financial Markets Authority chairman Craig Stobo resigns after investigation finds he made too much political commentary (2026-05-04)
• FMA looks into workplace culture concerns ‘as a matter of urgency’