The Financial Markets Authority has rejected a box-ticking-on-steroids approach to law enforcement, in favour of allowing the companies under its jurisdiction to develop their own systems for identifying problems.
The authority's compliance director, Elaine Campbell, told a Wellington law firm that the regulator wants firms to contact it as soon as they are aware of a problem.
Ms Campbell said the Authority will be as interested, or even more interested, in the remedial action a firm is taking to correct a problem, rather than in what's gone wrong.
It wants firms to go beyond compliance to meet the spirit of the Financial Markets Conduct Act.
Ms Campbell said the directors' lack of accountability is one of the lessons learned from the global financial crisis.
She said boards need to be thinking about putting consumers at the forefront of their business, to ensure consumers have the best outcomes possible.
"For that to occur, they really need to think about what this legislation is driving at, rather than pushing compliance down the organisation, to lower levels, to run through check lists, to make sure that the organisation squeaks over the legal line."