Guest Post: The Reserve Bank Board

A guest post by a reader:

“The Minister of Finance, Grant Robertson, has just released one of his most important press releases of the year, perhaps even this term of Government. He has announced the new Board of the Reserve Bank effective 1 July 2022. The statutory remit of the Reserve Bank board is: “overall responsibility for our strategic direction, functions and operations, and ultimate accountability for the delivery of our outcomes.”

One of the most important Board’s in New Zealand and one might expect stacked with the best and brightest economics and financial people in New Zealand, and from our global diaspora. A mix of heavyweight academics at masters, preferably PhD, level in finance and economics with significant research experience in monetary policy or similar. And balanced against that would be business people with heavyweight real world experience in how economies work and how the Reserve Bank can execute its obligations so there’s an environment where businesses can thrive and help create wealth and prosperity for all New Zealanders: people who’ve who have demonstrated an executive ability to understand and drive the economy, not just get appointed to boards.

You be the judge of the four new appointments. Here they are, referencing their Reserve Bank profiles:

• Jeremy Banks: BSc (Hons) in Computer Science from Otago University. Co-founder and CEO of Plink Software, a software company based in Nelson that produces a free te reo learning app, and similar. In 2019 Plink had 4 staff, but I expect its bigger now. A few minor governance roles.
• Professor Rawinia Higgins: Deputy Vice Chancellor Maori at Victoria University with research expertise in Maori language revitalisation, She has a PhD from Otago University, but the subject isn’t disclosed. Based on the disclosed undergraduate qualification and her current role, we can confidently exclude economics or finance.
• Byron Pepper: LLb and Bachelor of Management Studies (Finance) from Waikato University.  22 years with Goldman Sachs in investment banking.
• Hinerangi Raumati-Tu’ua: Masters in Management Studies (university not disclosed) and fellow of Chartered Accountants ANZ. Previous CFO of Tainui Group Holdings and lots of past governance roles in public, Maori and resources sectors.

The continuing members are:

• Prof Neil Quigley: Vice-Chancellor Waikato University. PhD from Toronto University (doesn’t say what in) but has research interests in industrial organisation, money and finance and economic history.
• Susan Patterson: a pharmacist with an MBA from London Business School and lots of Government and mid-level board experience.
• Rodger Finlay: BCA from Otago. An accountant with lots of Government, Maori related and mid-level board experience.

So there you have it, the seven people who the Minister of Finance believes have the collective wisdom and experience to oversee and guide our Reserve Bank. In summary:

• Two accountants who’ve practiced at mid-size domestic entities.
• A software developer running a small business in Nelson.
• Two academics, one with expertise irrelevant to the core role of the Reserve Bank and the other with expertise peripherally relevant.
• One ex-investment banker.
• No-one with a PhD level qualification in a relevant discipline.
• No-one with substantive treasury experience.
• No-one with a senior commercial banking background.
• No-one with senior executive experience (eg CEO or CFO) of a substantial international company, organisation or research entity, or even an NZX10 company like Spark or Fisher & Paykel Healthcare
• At least three with a deep knowledge of Maori custom , knowledge and language.
• An abundance of mid-level and Government governance roles.

Quite frankly, you couldn’t make this up if you tried.

DPF: I would slightly dispute the characterisation of Professor Quigley as only having peripherally relevant expertise as he in fact lectured me in monetary economics at Victoria University. But I agree with the concern expressed by the reader that the board is very light on people with expertise in monetary policy.