Roger Partridge: Picking off poorly performing regulators

The GFC had many casualties. In New Zealand, one was the former Securities Commission. A 2009 independent review of the Commission’s role in the collapse of the finance company sector signed the regulator’s death warrant.

Out of the Securities Commission’s ashes rose the Financial Markets Authority. Its modern ‘board governance’ arrangements separated the chair and CEO functions that had been combined in the former Securities Commission’s ‘chair’ role. The review identified benefits from “the checks and balances that accompany a split between governance and management.”

Nearly a decade after the Securities Commission’s demise, research from The New Zealand Initiative reveals strong evidence for a similar governance makeover at the Commerce Commission.