The chair of the Financial Markets Authority has resigned after an independent investigation found that his public commentary on the Treaty Principles Bill breached the standards of political neutrality expected of the head of an independent Crown entity.
Commerce and Consumer Affairs Minister Cameron Brewer announced on Monday that he had accepted Craig Stobo’s offer of resignation, ending a saga that has hung over the regulator since the middle of last year. Steven Bardy, who has been acting chair while the inquiry was underway, will continue in that role until a permanent appointment is made.
The investigation was carried out by Wendy Aldred KC and looked at four separate concerns raised by members of the FMA Board. Aldred cleared Stobo on two of them. There was no inappropriate relationship with a former staff member, and his applications for FMA-funded travel were appropriate. On the other two, the findings were less comfortable. Stobo had reasonably disclosed a conflict of interest tied to his independent directorship at The Independent Mortgage Company when it was first raised in July 2025, but then delayed standing down from that board until December that year. And, most significantly for his role as chair of a politically neutral regulator, his public commentary fell short of the standards required of him.
The commentary in question was a personal submission Stobo made to Parliament in support of the ACT Party’s Treaty Principles Bill. According to NZ Herald reporting on the Aldred review, the submission was framed as supportive of the coalition government’s position and critical of opposition parties. The bill was one of the most contested pieces of legislation of the parliamentary term and prompted the largest hīkoi in a generation. Green co-leader Marama Davidson publicly criticised Stobo at the time for the appearance of partisanship.
In an interview with Aldred recorded as part of the review, Stobo offered a candid explanation of his approach to public engagement. “I’m quite — what’s the word? I raise my head above the parapet. Other CEOs and directors won’t do that,” he told the investigator. The review concluded that the same instinct that had served him well as a private sector director did not transfer to the chair of an independent regulator funded by levies on the entities it polices.
Brewer in a statement issued by his office made the rationale for accepting the resignation explicit. “Aspects of Mr Stobo’s public commentary did not meet the standards of political neutrality expected,” he said. “Confidence in the independence and integrity of the regulator, and in its leadership, is fundamental.” He added that Stobo himself agreed that “it is important the FMA remains fully focused on its core regulatory role and continues to command the confidence of Ministers, regulated entities and stakeholders.” The minister also acknowledged that during Stobo’s tenure the authority had worked through “significant change across the financial services sector.”
Stobo was not a holdover appointment. He was headhunted into the chair role in 2024 at the request of the previous Commerce and Consumer Affairs Minister Andrew Bayly. He brought 35 years in the financial sector to the position, including a career in investment banking, taxation work that drew on advice he had given both Labour and National-led governments, and a string of listed company directorships. He has also been a director of the Local Government Funding Agency. The episode is therefore not a story about an opponent being pushed out — Stobo was the coalition government’s pick — but about a coalition appointee being found to have crossed the line in favour of his own appointers.
That fact is what makes the resignation politically interesting. Independent Crown entities such as the FMA are designed to be insulated from the government of the day so that the markets they regulate can rely on consistent enforcement regardless of which side wins office. The Public Service Commission’s code of conduct, which sets the political impartiality standards Aldred applied, exists precisely to stop the heads of those bodies from looking like extensions of any political project. A chair who publicly cheers for the coalition and criticises the opposition makes that compact harder to defend, even if the substance of the regulator’s work is unaffected.
The opposition will see vindication in the resignation. The Greens in particular have argued for tighter expectations around the political conduct of Crown entity leaders, and the Aldred report gives them a live example to point to. Labour has been quieter in recent weeks on regulatory governance issues, but the report also reopens the question of whether any review of appointment processes is warranted given how recently Stobo was put forward.
For Brewer the choice is now about replacement. The minister inherits a search for a chair who can restore confidence at a regulator that has been under pressure on multiple fronts, including its handling of cryptocurrency promoters, conduct supervision of insurers, and litigation arising from the FMC Act licensing regime. A board led by an interim chair is workable in the short term but is not a long term solution. Industry sources have flagged that a wider field of candidates than is usual for these roles will be needed if the appointment is to be seen as genuinely independent of either side of the House.
The full Aldred report is available through MBIE. The minister’s statement sits alongside it on the Beehive site.
Should the political impartiality rules apply more strictly to Crown entity leaders, or has Wellington overcorrected here? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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