New Zealand’s Financial Markets Authority exists to hold financial firms to account for their conduct and culture. In 2018 it co-wrote, with the Reserve Bank, the reviews that told our banks and life insurers their cultures needed work. Right now its own board is urgently assessing cultural concerns raised by the FMA’s former staff, its chief executive is on leave while that happens, and the story has run from Stuff to the New Zealand Herald to Bloomberg.
For clarity: the allegations are unproven, the review hasn’t reported, and the people involved deserve fair process. I’m not writing this to pile on. I’m writing it because what’s been publicly documented aer relevant to what we do, and illustrate a couple of things particularly well. The FMA case makes it unusually visible.
What happened?
Here’s the thumbnail.
In May this year, an independent investigation by Wendy Aldred KC into the FMA’s chair, Craig Stobo, was released, and Stobo resigned after it found aspects of his public commentary hadn’t met the standards of political neutrality expected of the role. The same month, the FMA announced that chief executive Samantha Barrass wouldn’t seek reappointment when her term ends in January 2027.
Then in late July, Stuff’s Paula Penfold put questions to the FMA board, drawing on accounts from multiple former employees who described bullying by managers, a culture of fear, and poor handling of internal complaints. Within two days the board issued a one-sentence statement saying it had “recently become aware of cultural concerns at the FMA” and was assessing them as a matter of urgency. Samantha Barrass went on leave the same day the story ran, with board member Alastair Hercus stepping in as interim chief executive. MBIE has since engaged with the board on next steps.
What the evidence actually shows
Anonymous allegations are easy to dismiss, so we’ll put them to one side or a moment and look only at what’s documented.
The Aldred report itself establishes one uncomfortable fact. Among the matters investigated was an alleged inappropriate relationship between the chair and a former staff member. The investigation found no evidence of it. Which means a false rumour about a named colleague circulated widely enough inside a regulator to end up in a ministerial investigation. That former staff member, Kyla Bottriell, then said publicly in May that she’d raised concerns through proper channels about the FMA’s internal culture, rumour-spreading and leaking, and that she expected the FMA to support “a credible independent review of the conduct and culture issues that allowed this to occur.”
Stuff’s reporting adds two more documented details. It obtained documents referring to senior discussions about an external review of workplace culture, and it remains unclear whether that review ever went ahead. And when the board said it had only recently become aware of concerns, a former employee at executive leadership level told Stuff she was surprised to hear it. Official Information Act documents show ten senior leaders left the organisation in the year to June 2025.
Let’s put those pieces together how they seem to fit:
- A public call for a culture review in May.
- Internal documents showing senior people had already discussed one.
- A board statement in late July describing the concerns as recent.
Something in that sequence doesn’t add up, and the review will presumably establish what.
Knowing is not acting
Here’s why this pattern is relevant for us.
As you may know, Amy Edmondson defined psychological safety in 1999 as a shared belief that a team is safe for interpersonal risk-taking, which includes raising concerns without fear of punishment or humiliation. Twenty-five years of research since then keeps returning to the same finding. Formal mechanisms for speaking up, the policies and hotlines and HR processes don’t, of themselves, create psychological safety. What creates it is the response. Edmondson and Bransby’s 2023 review of the field is blunt about this gap between voice channels existing and voice being acted on.
People calibrate what’s safe to say by watching what happens to the last person who said something.
By that standard, the question for the FMA isn’t whether concerns could be raised. On the public record, they were raised, through proper channels, months before the Board acted. The question is what happened next. Honesty, we don’t know yet. All we have to go on is the timing, which strongly suggests the urgent assessment began only after a journalist started asking questions, and not immediately after the concerns arrived.
I’ve seen this sequence in organisations that would consider themselves nothing like a troubled workplace. Concerns go in through the right door. They sit. The people who raised them draw their own conclusions and either go quiet or leave. And leadership genuinely believes the culture is fine, because the signal that would tell them otherwise has stopped arriving.
What the numbers don’t tell you
There is one published figure that does need some explanation. OIA documents show 77 people left the FMA in the year to June 2025. That sounds damning against a headcount of 338, but it’s weaker evidence than it looks.
Twenty-five of those departures were redundancies during a downsizing year, and the FMA’s own annual report (published November 2025) discloses rolling voluntary turnover of 13 percent, up from 11.9 percent the year before but well below its own 2023 figure of 18.9 percent. If turnover alone were the test, 2023 was worse but, in the scheme of things, it didn’t make the papers.
However, two things in the annual report are harder to explain away. Ten of the year’s leavers were senior leaders, which is a significant chunk of experience walking out of a 340-person organisation in 12 months. And the report describes, at some length, the FMA’s wellbeing programmes, its mental health first-aiders, its participation in anti-bullying initiatives like Pink Shirt Day. All of that can be true at the same time as the allegations, and that’s exactly what we want to point to. Visible culture programmes measure effort.
Psychological safety is measured somewhere else entirely, notably in what happens after someone raises a concern.
Here’s the so what
If an organisation whose staff assess conduct and culture for a living can end up here, expertise is clearly no protection. Neither is a good policy suite. So the practical question for any leadership team reading this coverage with a slight sense of relief that it’s someone else is simple. How would you know?
Not “do we have speak-up channels.” You may have. The questions that predict whether you’d catch this early are much less comfortable.
When did someone last raise a concern that reached the executive or board level, and what happened to it? Critically, what happened to them? If the answer to the first question is “not for ages,” that might not be the reassurance you think it is. You can imagine answers to the second question…
In Edmondson’s terms it may be your clearest warning sign, because healthy organisations generate a steady flow of bad news. If all seems quiet, it’s more likely that people aren’t bothering. Boards should be especially wary of learning about culture problems from journalists. By the time a reporter has the story, your staff concluded some time ago that the internal routes weren’t worth using or, worse, were too dangerous to use.
The FMA review should be allowed to run, and it may yet find that the organisation responded better than the timeline suggests. Either way, it’s a useful lesson. The test of a psychologically safe culture is what happens in the days after someone speaks up. Even if we think we aren’t, we’re running that test every day.
Photo: Lynn Grieveson from Newsroom (2021)
References
Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350-383. https://doi.org/10.2307/2666999
Edmondson, A. C., & Bransby, D. P. (2023). Psychological safety comes of age: Observed themes in an established literature. Annual Review of Organizational Psychology and Organizational Behavior, 10, 55-78. https://doi.org/10.1146/annurev-orgpsych-120920-055217
Aldred, W. (2026). Investigation into allegations about the conduct of the chair of the Financial Markets Authority. Ministry of Business, Innovation and Employment. https://www.mbie.govt.nz/dmsdocument/31975-investigation-into-allegations-about-the-conduct-of-the-chair-of-the-financial-markets-authority
Financial Markets Authority. (2025). Annual Report 2024/25.
Penfold, P. (2026, July 30). FMA Board acknowledges ‘urgent’ culture concerns after questions from Stuff. Stuff. https://www.stuff.co.nz/nz-news/361012931/fma-board-acknowledges-urgent-culture-concerns-after-questions-stuff