PAUL MCBETH: Craig Stobo and the silence of the lambs

Paul McBeth is the editor of The Bottom Line and Curious News, and previously worked at BusinessDesk for 15 years.

The departure of Craig Stobo as chair of the Financial Markets Authority wasn’t overly surprising.

He was stood down to make way for a very hush-hush review into “matters raised” about him late one Friday afternoon in December, with the only details leaking out from the dogged work of the National Business Review’s co-editor Hamish McNichol.

To be frank, Stobo’s exit largely seemed like a formality.

Once the drums started beating loud enough for the public to be informed, it’s generally more a case of watching a trainwreck unfold than a coolly dispassionate assessment of the facts. Just reflect on any time someone has defended their actions as being within the rules.

And in Stobo’s case, barrister Wendy Aldred KC found the rules weren’t followed in the case of being a good public servant and keeping one’s trap shut. We expect our politically appointed elites to not be, well, political.

Briefly, Stobo was cleared of having an inappropriate relationship with an FMA staffer who met up with him on a private trip to Estonia; dragged his heels in leaving a minnow mortgage player; and made a perfectly acceptable travel request that made his fellow director and audit committee chair Steven Bardy uncomfortable in having to say no.

You shouldn’t take it so personal

Where he fell down was in the old hoary chestnut of wearing multiple hats in making public statements that veered into political commentary, including on the climate reporting disclosure regime that falls under the FMA’s remit which even he recognised as something he needed to tell his board colleagues.

There’s the slightly problematic finding that his personal submission on the controversial Treaty of Waitangi Bill was at odds with the FMA’s Te Ao Māori strategy, which as constitutional law pedant Graeme Edgeler pointed out in an X post veered into the realms of parliamentary privilege in that someone can’t be punished for giving evidence to a court, including the country’s highest court.

But then, he also made his opinion clear on the matter at the New Zealand Herald’s Mood of the Boardroom event, so still ultimately a no-no.

As Aldred’s report points out, the chair of a Crown entity should really know they need to be seen as politically impartial, even if they’re not so apolitical behind closed doors.

That’s the legal test, and one he should’ve been well-aware of after Rob Campbell’s ousting as Health NZ chair by then-minister Ayesha Verrall over his critique of the National party’s Three Waters policy.

Heck, even Ruth Dyson and Steve Maharey got ticked off for lower-level offending when the dyed-in-the-wool former Labour ministers made snide remarks about the rising tide of then-Opposition leader Christopher Luxon’s National party when they were Crown entity chairs.

I thought that it was well understood

The don’t ask, don’t tell policies are fairly cut and dried and Stobo and Campbell drifted off the reservation by failing to uphold the public service principle of public neutrality preserving their ability and that of the organisations they oversaw to serve the government of the day.

Of course, that notion of the public servant above the fray atop a high-performing organisation that follows both the spirit and the letter of the minister’s directions might be more akin to that very New Zealand experience of the hype not living up to the reality.

Rob Campbell was tapped to chair Health NZ as a known changemaker and hands-on director, and his frustrations with a bureaucracy resistant to change are well-documented.

Funnily enough, his ousting hasn’t done anything to improve the health sector and its insatiable appetite for more.

Similarly, Stobo’s directness and fondness to discussing all and sundry was a known quantity – as was his ability to work across the political divide given he drove the early tax work of the 2000s that ushered in the portfolio investment entity regime for Michael Cullen and recommended a trans-Tasman financial services hub for John Key’s administration.

And curiously, both sectors got a close going over by visiting boffins from the Organization for Economic Cooperation and Development in its biennial review of New Zealand.

You just did what you’re supposed to do

On the health side of the equation, the rich nations’ club pushed for greater use of digital tools and increasing the sector’s capital investment to help address the ageing population and persistent workforce shortages.

No silver bullets of course, but some international perspective’s always handy in reminding us that we lag the OECD average when it comes to the number of practising doctors per capita and how many hospital beds we have, despite the fact that we spent a little more than most rich nations as a proportion of the economy and per capita.

And in a turn-up for the books, New Zealand’s lacklustre capital markets got a heavy going over by the Parisian policy wonks, even if the initial local coverage largely latched on to the regular piece of advice to link the pension’s age of eligibility to life expectancy and means testing superannuation.

The actual section on capital markets spans almost a third of the 149-page report, identifying many of the shortcomings of our local market and pulling out all manner of recommendations that have been put forward to policymakers in one form or another by local working groups over the past 20 years or so.

The fact that both our health system and capital markets warranted a deeper dive from an international body might elicit a desire for a champion to emerge and actually drive change where it’s needed.

But best leave that for private citizens. After all, we wouldn’t want things to get too political.

Image from Hamid Samanian on Unsplash.