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Takeovers Panel most respected regulator in survey

18 April 2018

A survey of 24 New Zealand regulatory agencies has placed the Takeovers Panel as most respected, with Heritage New Zealand Pouhere Taonga coming out as least-respected.

The results are contained in a report Who Guards the Guards? Regulatory Governance in New Zealand, authored by Roger Partridge and Amy Thomasson for The New Zealand Initiative.

The New Zealand Initiative describes itself as an independent public policy think tank supported by chief executives of major New Zealand businesses.

The report aims to follow the 2014 Productivity Commission report, Regulatory Institutions and Practices, which found a range of shortcomings with regulatory agencies.

The authors say they met major consumer groups to gain their views on leading commercial regulators and surveyed just over New Zealand businesses and professional services providers and asked them to rate and rank the commercial regulators they deal with across 23 performance metrics. Information was also gathered by interviews with leaders of several regulators and government department officials.

The survey result includes ratings for three parts of the Commerce Commission.

Table of rankings of regulators
RankRegulatorTimes
Ranked 
Times
Ranked
Worst 
Times
Ranked
Best 
Mean
Score 
1Takeovers Panel12062.3
2External Reporting Board4021.6
3Inland Revenue Department30351.1
4Financial Markets Authority29191
5Accident Compensation Corporation30350.6
6Ministry for Primary Industries15020.6
7Privacy Commissioner18130.6
8Energy Efficiency & Conservation Athty11110.5
9Commerce Commission - Price Regulation23440.3
10Commerce Commission - Telecoms9120.3
11Department of Conservation8010.3
12Civil Aviation Authority7130.1
13Health & Disability Commissioner1000
14MBIE4357-0.1
15WorkSafe New Zealand3063-0.1
16Ministry of Transport1211-0.2
17Commerce Commission - Competition & Consumer33102-0.6
18Electricity Authority1130-0.8
19Environmental Protection Agency621-1
20Earthquake Commission810-1.1
21Land Information New Zealand930-1.1
22Transport Accident Investigation400-1.1
23Reserve Bank301-1.4
24Office of Film & Literature Classification300-1.5
25Fire and Emergency NZ800-1.6
26NZ Transport Agency1631-1.7
27Broadcasting Standards Authority530-1.9
28Human Rights Commission730-2.2
29Heritage NZ Pouhere Taonga220-5.5
Focus on three regulators

The authors say they focused in detail on three regulatory agencies whose influence is felt across the entire economy - the Financial Markets Authority (FMA), the Reserve Bank of New Zealand, and the Commerce Commission: "If any regulators are to be respected, it is most important that these three are".

They say their research found comparatively poor levels of respect for both the Commerce Commission and Reserve Bank. On average only 39.9% of survey respondents either agreed or strongly agreed that the Commerce Commission met the 23 KPIs, and 25.8% disagreed or strongly disagreed. The results were worse for the Reserve Bank, with 28.6% of respondents agreeing or strongly agreeing and 36% disagreeing or strong disagreeing.

The FMA scored comparatively well, with 60.8% of respondents agreeing or strongly agreeing that it met KPIs and just 10.3% disagreeing.

The authors say two aspects in particular of the FMA’s institutional framework, both of which are copied from the private sector, appear to contribute to the FMA’s higher ratings.

"First, the separation of governance and management functions of the FMA’s chair by the appointment of a highly skilled CEO. Second, the transformation of executive ‘commissioner’ positions into non-executive board roles. In tandem, these two factors appear to contribute both to greater levels of accountability by the executive decision-making organ of the FMA and to more widely acknowledged expertise at the board level."

They say that as the board governance model is the most common governance structure among New Zealand’s statuory Crown entities, it is anomalous that the same model is not adopted for the Commerce Commission and the RBNZ.

"The lessons from the FMA are that the model creates better internal checks and balances on regulatory decision-making than the alternative ‘commission model’ of the Commerce Commission or the ‘single member decision-maker model’ of the Reserve Bank."

Last updated on the 16th September 2019