Episode 22: Craig Stobo

In Leaders Getting Coffee episode 22, we speak to the newly appointed Chairman of the Financial Markets Authority, Craig Stobo.

 Craig is perhaps best known in investment and financial circles, and as a Chair of various and corporate organisations. But his leadership story runs deep – from mountaineering to the boardroom. His experiences across the financial and investment sector make for compelling listening.

 

Craig talks to Bruce about dealing with death in the Himalayas and a failed summit attempt. But they quickly move on to the state of the New Zealand economy, and in particular our lack of productivity.

 He has solutions too, and a clear desire to see us become better at attracting the foreign investment we so desperately need. Using the success of the Irish economy as a model, he notes the natural advantages that New Zealand could bring to a foreign direct investment strategy of it’s own.

 The lively discussion navigates a wide range of issues including infrastructure, education, and how war and immigration are driving changes in the world economy.

 And of course they discuss the Craig’s new role, the importance of the Financial Markets Authority and the need for good conduct in our financial community.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:16):
Hi everyone.

Speaker 2 (00:17):
WAM is Bruce Kottrull and it's great to welcome you
back to Leaders Getting Coffee for episode twenty two.

Speaker 1 (00:23):
Thanks for joining us.

Speaker 2 (00:24):
We have another great New Zealand Leader lined up to
speak to today, but before we do, I want to
briefly chat about my latest column from the New Zealand
Rock Herald, which ran on Saturday.

Speaker 1 (00:35):
The eighth of June.

Speaker 2 (00:36):
The headline read we need a long term plan for
New Zealand and the article discussed the fact that historically
our two major political parties have typically straddled the center
line in politics and as a result, policy has been
broadly consistent. But now that the fringe parties under MMP
are pulling National and Labor apart, we're going to continue

(00:58):
to see policy getting further and further too.

Speaker 1 (01:00):
And the resort of that is that we have, as we.

Speaker 2 (01:03):
Have a government come in with all their ideas, as
we did with the last Labor government. They spend a
lot of money on the protects and ideas that end
U are not going anywhere.

Speaker 1 (01:12):
Then the next work.

Speaker 2 (01:13):
Come in, they cancel all those things and come up
with their own and away we go again.

Speaker 1 (01:17):
A couple of the latest Examples include later Labor.

Speaker 2 (01:20):
Coming in in twenty seventeen, canceling charter schools, so oil
and gas expiration and the like, implementing light rail, and
of course the Maori Health Authority then National come in
from twenty twenty three shut down light rail and Maory
Health and put charter schools and oil expiration back into
the mix, and around and around.

Speaker 1 (01:39):
We go silf a foot. We cannot afford this. Instead,
we need those.

Speaker 2 (01:43):
Two main political parties to agree on a basic framework
book for comfort country.

Speaker 1 (01:48):
For the long term.

Speaker 2 (01:49):
We need agreement around store principles and health education inmgration,
infrastructure and.

Speaker 1 (01:54):
Law and order at least acros, the.

Speaker 2 (01:56):
Air house, housing, welfare and AJO others and their as well.

Speaker 1 (02:01):
So this desire explanation of my thoughts.

Speaker 2 (02:03):
And ideas in the article which you can find Lendsay
and Harold got toto Zen under the headline we need
a long term planned for New Zealand, or of course
you can find it under published articles in my website
dubdubdub dot Bruce Kott or forward slash blog. Of course,
the good people at nzed ME, the publisher of the
New Zealand Herald, help us get this podcast out every week,

(02:25):
so thanks to you guys, and go have a look
at the article. I've had my say and let me
know what you think.

Speaker 1 (02:31):
We'll be back.

Speaker 2 (02:31):
Shortly with this week's guest on Leaders Getting Coffee. Welcome
back to Leaders Getting Coffee and thanks again for being
with us. Our guest this week is Craig Stobo, someone

(02:52):
who is well known in the business and investment community
in New Zealand, and most recently he's been named as
the Chairman of the Financial Markets Authority or the FMA
as we know it, and we're going to talk a
little bit about that later in this discussion.

Speaker 1 (03:06):
Craig is also currently.

Speaker 2 (03:07):
The chair of New Zealand wind Farms Limited and the
New Zealand Local Government Funding Agency. And he has had
a career that I guess has delivered him to this
point in that career is kind of interesting. He's a
graduate of Otaga University. He worked for the DFC, remember
the DFC back in the old days, and then he
worked for Bankers Trust as their economist and interest rate

(03:29):
product sales manager.

Speaker 1 (03:30):
You wouldn't have a title like that nowadays. It's a
bit of a mouthful.

Speaker 2 (03:34):
He then co launched BT Funds Management and became the
CEO in two thousand and In that organization they grew
assets up to three billion dollars. Under his watch, they
won the Best Places to Work while he was running
the show and twice won the New Zealand Fund Manager
of the Year. And in twenty ten Craig joined the

(03:55):
chaired the Task Force on Exporting Financial Services for the
John Key Government. He was the chair of Flyway Group
during its IPO onto the New Zealand Stock Exchange, and
he chaired both sat AND Portfolio and Elevation Capital until
May twenty twenty four. He was the chair of AIG
the Insurance Group for ten years from twenty twelve and

(04:17):
Precinct Properties, the company behind some of Auckland's massive office
towers between twenty ten and twenty twenty three. He has
a Bachelor of Arts with first class honors and Economics
from Otaga University, and he graduated from the Wharton Schools
Advanced Management Program. He's also a Charter Fellow of the
New Zealand Institute of Directors, an associate member of the

(04:38):
CFA Society and a member of the New Zealand Initiative.
I had a look at his CV. We've got a
bit in common. He played senior rugby Czech. He participated
in a few multi sport events Czech. We both did
the coast to coast at one point in our crazy
old lives, but I didn't do this. But he's joined
mountaineering expeditions in the Andes in Pakistan and the Himalayas

(05:00):
of Nepal, and his current interests include ocean swimming, skiing, sailing, literature,
drama and wine. We recently caught up. We hadn't seen
each other for all for a while, but we caught
up on the roadside during the Taupo Iron Man watching
our sons compete, so that probably says something. And I
decided it was time we got him to share our
thoughts with all of you.

Speaker 1 (05:19):
So Craig Stoveo, welcome to lead us getting coffee.

Speaker 3 (05:23):
Wow, that's our long introduction.

Speaker 4 (05:24):
It's been embarrassing, but thank you so much for yeah
doppointing several crossovers that we share in commons.

Speaker 3 (05:31):
So that's one. Well, thank you so much for inviting
me on your show. You're welcome.

Speaker 2 (05:36):
One thing I haven't done, as I mentioned, is mountaineering
in the Andes and Nepal.

Speaker 1 (05:40):
How does somebody like you end up doing something like that?

Speaker 4 (05:44):
As a family Omoro, North Otago, we enjoyed going for
warps in the hills. We had still have a cottage
in Queenstown, so we've the root Burn, or up in
Loman or hit up the.

Speaker 3 (05:57):
Arrow River on camps and trips and deaths.

Speaker 4 (05:59):
Sort of grew through university days to join the Utaga
University Tramping Club and they're talking into the hills. And
then in Warnington, where I started my work career, I
joined the tararoa tramping club who's famous for refusing to
admit ed Hillary to its membership, which is of a
stain on their membership criteria.

Speaker 3 (06:20):
But there are an old club being around to the
nineteen twenties.

Speaker 4 (06:22):
But at that club, after doing a couple of horses,
found myself in a group of people that were ambitious
to go into hills but serious mountaineering. So a group
of four of us did lots of climbing in New Zealand,
Mount Tasman, Mount cook Leedenfield Hidinger and then a memberle
trip from Klondike Corner on the Weimacheriri all the way

(06:45):
down to Nunkok National Park, of a ten day odyssey,
crossing passes and rivers. It's just a sensational country.

Speaker 3 (06:51):
And the same group. That same group decided.

Speaker 4 (06:54):
To lead organized trips to Peru a nine to eighty
five where we climbed from memory thirty one peaks, including
a beautiful spiral peak called Alpha Mao but like Mount Aspiring,
and another peak called Buska Range, which is the highest
speaking Peru. We were there on the Cordillera Blanca, which

(07:15):
is the main range, but also the Cordillera Ywash, and
there's a mountain in there called Arupaha, and that's the
mountain where those two climbers had that amazing adventure where
one of them was dragging the other over a cliff
and he had to cut the road and the bottom
guy fell down into the crevasse and broke his leg,

(07:36):
but they couldn't find them, but the crevass victim climbed
his way out of the crevass and dragged himself down
to camp down below.

Speaker 3 (07:45):
We were climbing.

Speaker 4 (07:46):
There two or three months after that event, on the
same face, on the same face, so extraordinary. So that
got us going and to say what else can we do?
And we then organized a trip to Pakistan to the Himalia,
and that was led by one of New Zealand's famous climbers,

(08:08):
Rob Bull. Yeah, Rob died on Everest, but that trip
he had broken his ankle on the gal while.

Speaker 3 (08:13):
In India, so he asked me to leave the expedition.

Speaker 4 (08:17):
And that involves organizing one hundred and eighty four porters
or twelve climbers walking up a teen day trip.

Speaker 3 (08:25):
Up the Baltro Glacier past Trango.

Speaker 4 (08:29):
Towers to an area that is surrounded by broad feet
K two, Gashiprom one, Gashroom two. And our objective was
to climb Gashiprom too, which is one of the fourteen
eight thousand meter peaks in the world. Yeah, and we
I had a crack with my climbing companion heading up

(08:49):
rheinhild Mess's attempts his alphine attempt route, but we got
lined up of high winds, very uncomfortable night in a
single skin tent with the wind buffetinger, so backed off.
Another group went around the main route and two of
the lead climbers went up with the Pakistani Army climbing team.

(09:09):
You've got to understand the Pastani Army's got a climbing
team because across.

Speaker 3 (09:13):
The other side.

Speaker 4 (09:14):
Across the other side is India and India quintly shelling
scalling behind us so we could hear the crump of
shells behind us, protecting the past. Anyway, they had to
learn climbing skills. The unfortunate story is our two guys
backed off because of snow conditions. The Pakistani Army guys
stayed on the face over night when snow. They got

(09:36):
up in the morning at seven am and I was
listening to the scared the schedule of radio skied down
below the base camp and one of the guys had
polymonio dema, so I had to come down and then
a silent and unfortunately avalanched, avalanched off and all four
of them died, and we had to pick up the
pieces and make snow poppins. The Army helicopters came up

(10:00):
twenty thousand feet. They've got nothing in them. Lift the
skin and a roadablade and the pilot. Everything else is
taken out, so the air so thin and took everyone
the remains back to Islamabad, ral Pindi. That kind of
shattered them arale, so we all be I decided to
leave leave the camp, but I had to meet with

(10:21):
brothers and sisters and aunts and uncles and family back
in ral Penny to relay the last last minutes of
their lives. So having said that, we left two about
three of our people behind, and they illegally climbed gashaprom
One and were chased out of Pakistan by the Pakistani authorities.
They made it across the border. So I did the

(10:42):
good thing and had enough savings from our funding to
pay the Pakistani authorities for the peak fee for the
peak that we illegally climbed. So I kind of hope
I can still get back into Pakistan. That's that's a
hell of a story. Yeah, and I had I had
no knowledge. I thought I knew a bit about you,
but I did know that.

Speaker 1 (11:00):
But you what I.

Speaker 2 (11:01):
Didn't say in the introduction as you went to White
Teki Boys High School, which was a pretty good.

Speaker 1 (11:06):
School back in those days, is it's still a good school.

Speaker 3 (11:09):
It's a good school.

Speaker 4 (11:09):
It's still services the rural areas of North Targo, Spertago,
South Canterbury goes as far as South Otago. Its roles
dropped from my day of nine thirty boys, including three
hundred borders to a still size now about four fifty
so pop and naturally functioned a whole lot of things,

(11:33):
including you know, the rural population change, the choices that
boys have around the country. But it's got a magnificent
Hall of Memories that was built in nineteen twenty seven
and it's a memorial to the soldiers in World War
World War One, that is, boys that went to World
War One and some of them didn't come back.

Speaker 3 (11:53):
The centenaries in twenty twenty seven.

Speaker 4 (11:56):
I would rank it as best as good as the
Crillion in Wellington, as a whole lot of memorabilia around
the outside of the walls, fowls flags, all these artifacts
that were brought back by the boys from World War One.
It's a minor history, so intend to have celebrations for
the wall and twenty twenty seven fantastic.

Speaker 1 (12:18):
And you're still involved with the school, aren't you.

Speaker 4 (12:20):
Yes, I'm chairman of the endowment fund that Waite Take
Your Boys High School Foundation.

Speaker 3 (12:24):
I should mention it.

Speaker 4 (12:25):
I think it's the only school, state school in New
Zealand that has its own Act of Parliament.

Speaker 3 (12:32):
Is that right? That's how unusual it was.

Speaker 4 (12:34):
It was started in eighteen eighty three and it was
built in the outskirts of the Bomber at the time,
now part of the Armory Township. But yeah, it's got
its own acts, so it's pretty unusual still. And during
its reputation was built with Frank Milner, who was basically
an imperialist, very strong supporter of Mother England.

Speaker 1 (12:55):
But he built a.

Speaker 4 (12:55):
Reputation for the school such that when the spring Box
came out in nineteen fifty five, they sprung down with
our first.

Speaker 3 (13:02):
Fifteen prior to going down to Karaso.

Speaker 1 (13:04):
Wow.

Speaker 3 (13:05):
Yeah, so pretty pretty amazing background.

Speaker 2 (13:08):
Fantastic school days ended and you went down the road
to Otago University.

Speaker 1 (13:14):
Where you where you studied for.

Speaker 2 (13:17):
A Bachelor of Arts and Economics. So you must have
been financially inquisitive at a young age because I went
to Otago University as well as you know, and I
couldn't get that exercise about economics.

Speaker 1 (13:29):
What was it about you?

Speaker 4 (13:30):
I had a teacher. It's just interesting how you latch
on the subjects. I had wonderful teachers at White Teki Boys, English, French, Latin, physics,
chemistry and economics in my last year and I just
said to the teacher this is just so obvious.

Speaker 3 (13:47):
Why is it a subject?

Speaker 4 (13:48):
Like it's like waking up in the morning and making
your bed, Like why is this a subject? And I thought, well,
I must have an ability of it. It makes it
easy for me. So I continued into university with English
and economics, but I also did Russian in my first year,
learning in Russian language because I love languages.

Speaker 3 (14:07):
I was still of wishing, which is pected.

Speaker 4 (14:08):
I kept going with Russian and English and joined the
movement of the Soviet Union to Perestroika to the late eighties,
and who knows what would have happened, but I didn't
keep it going. But so yeah, I decided to do
honors and economics, got the first class honors and did
Stage three in English, which I still loved the English
language I love. I love being a wordsmith. So that

(14:31):
kind of foundation kept the curiosity going and kept the
fire going. I think for us, Yeah, absolutely, What are
the highlights from your university days?

Speaker 1 (14:38):
Are you allowed to say those in an interview like this?

Speaker 3 (14:41):
Yeah? Absolutely, No.

Speaker 4 (14:43):
I think Targo's unique in its residential college system, so
that meeting students more around New Zealand a whore residential
hall atmosphere and sometimes competing with other residential halls was
just amazing, the orientation and then the proximity of the
halls to the university. You're in a you're kind of

(15:04):
a little mini society. And I threw myself into activities
of all sorts, including rugby debating, where I was debating
with Rod car and Michael laws Though in my debating team,
and we competed for a target against other universities, and
we had our own little unions around the country debating
as well.

Speaker 3 (15:23):
Yeah, and Noad's going with the trapping and climbing, Yeah.

Speaker 2 (15:27):
Well, was it about finance and investment that grabbed your
attentions as your career took off?

Speaker 4 (15:33):
Well, I remember writing articles for the Take of day
Times with a group of us in our honors class,
raising concern about the Muldern government's policies, which were basically
a whole lot of sticking plaster around wages and prices
and those horrible fuel days we had no fuel with
it to his second day, you'd be had to buy
fuel if you had an odd numbered car or an

(15:54):
even numbered car, and you had to put petrol and
depots on the way to Queenstown and pull up your
car on the way through with these depots, really weird atmosphere.
So I remember being concerned about policy settings because it
affected people's lives. So when you think about economics, that's
the study of the allocation of scarce resources amongst infinite once.

Speaker 3 (16:18):
How do you do that? That's basically what's about.

Speaker 4 (16:21):
But you learn really good concepts like opportunity costs, you
have trade offs, all those.

Speaker 3 (16:26):
Concepts that are important for making business decisions.

Speaker 4 (16:29):
And you have a lens that eventually means where you
get into capital markets or finance and you have those
same issues. How do you value security? What are the
opportunities of this security? This is another one in a portfolio.
So I think it's a really good grounding for finance,
but also for lots of other things, whether it's health.

Speaker 3 (16:45):
It's still got issues of health.

Speaker 4 (16:46):
For education, we also have the same economic dilemma.

Speaker 2 (16:50):
Yeah, absolutely interesting. Your website says that you went off
and worked as a diplomat. Diplomat at one point?

Speaker 1 (16:57):
What was that about?

Speaker 4 (16:59):
Yees? So graduated and think what do I do now?
So I had choices of cleaning tanks for mobile at
Potoni and becoming an employee of Mobile could have doin
Treasury with Roger Kerr, who was an amazing Treasury official,
lead lots of initiatives in the tax area, but it

(17:20):
was reporting to Muldoon and everything that went up to
Muldoon was crossed out. He didn't listen to the advice
and Treasury, so I didn't see the point and enjoyed
at that point.

Speaker 3 (17:31):
And the Reserve Bank.

Speaker 4 (17:32):
I was interested in the market side, but they're looking
for research analysts. Didn't sort of fit but foreign affairs for.

Speaker 3 (17:39):
Me, and I had a grateuous from current affairs and
foreign policy from school and university days.

Speaker 4 (17:47):
And sort of had a great group of graduate in
terms with me, quite a large and who I still
know of what they're doing today, some of whom are
still that most of us have left.

Speaker 3 (18:01):
So I found that a great exercise.

Speaker 4 (18:04):
I was in the Australian Division for a year, then
I was seconded to work for the Australians and the
Department of Foreign Affairs in Australia and Canberra for a
year on suppontment. So I learned about foreign policy is
use the peculiar to Australia. There much more censor to
the Middle East because of their domestic population closer to Asia.

Speaker 3 (18:24):
And with that lens, you know, when you go across,
you realize.

Speaker 4 (18:28):
That we have to beat have Frum a lot harder
with Australia because their interests are north and West, not
necessary East. The big lesson for me. But when I
was at Foreign Affairs, we were asked the question by
Deputy Secretary Bryce Harland, who was our most foreign most
important foreign policy partner. None of us, None of us

(18:50):
said Australia. So Australia is our most important foreign policy
partners trade all sorts of reasons.

Speaker 3 (18:56):
And we're really we should work harder on that relationship.

Speaker 1 (19:01):
Yeah, absolutely, I think I think that.

Speaker 4 (19:03):
Next the next day when I was in Canberra, was
I went to the Convention Center when Hawk and Keating
came to power right in nineteen eighty three, the same
year that Kiwi won the Melbourne Cup, which was great
to be a Kiwi and camera when he we win
the Mountain Cup. And I saw them come to power,
and then Keyty started deregulating markets, and I thought, it happen,
it is going to happen in New Zealand, and go

(19:24):
and behold you know, Longie Douglas come to power and
eighty four and exchange rate is deregulated and free from
its PEG and straits deregulated. So I decided that you
were able to get on the ground floor and worked
really hard when no one in New Zealand knew how

(19:45):
to manage, deregulate, defentral markets.

Speaker 3 (19:47):
It's completely new. If you could get in.

Speaker 4 (19:49):
Early and work hard and learn, you could build a
career here, which is what I did. So it became
moved from it being an economist to invest in banking
role in dfcz IL core.

Speaker 2 (19:58):
That's right, Yeah, interesting stuff. We both have another thing
in common. We both sort of trundled off at one
point and studied at an American university. I went to Stanford,
You went to Wharton. What are your thoughts on the
American university experience.

Speaker 4 (20:15):
I had a sort of two week advance management program.
Of course, it's like a supercharged NBA inside fifteen days.
Two weeks I had. I think I had one day
off the whole time. Otherwise you're working in lecture style
or you've got projects to do to complete as part
of a small team. What I found absolutely fantastic was

(20:37):
the proximity to amazing thinkers who had written books that
I would be reading a lot of his back in
New Zealand with these learning about some of their stories.
And what I'll recount to you was a gentleman who'd
written about technology, but he recounted a story of Belle
Labs before it was broken up, and the CEO or

(20:59):
the leader of the time that we have to reinvent ourselves.

Speaker 3 (21:03):
So tomorrow come in and we'll do it. We'll do
an event of study.

Speaker 4 (21:09):
Everyone came in and he turned the lights out and
turned the back on again. He said, well, I've got
to reinvent ourselves. What you know, what what can we do?
What can we do that's different? And one guys hit, well,
at the moment we pick up the handset on the phone,
what if the phone could walk to us? What a

(21:32):
great idea. That became the trajectory come obile telephony. Absolutely,
And the other was the obvious in retrospect that early
transport was a horse and a cart, horses always in front,
and when they built a motor car, the engine was
always in the front.

Speaker 3 (21:51):
Yeah, so simple when you think about it.

Speaker 1 (21:55):
But yeah, I just I just that up. Yeah I did.

Speaker 4 (21:59):
In seeing just the people, just amazing people all mid
career thirties and forties, thinking about what to do next
and make some great friends in Australia in particular, but
also Europe. A wonderful guy from Bangladesh I've stayed in
contact with.

Speaker 3 (22:15):
So it's about half Americans, half foreign scholars.

Speaker 1 (22:18):
It was, we're about the same. Yeah, we're about the same.

Speaker 2 (22:22):
So I'm guessing you'd recommend it to a mid mid
career executive nowadays.

Speaker 4 (22:27):
Well not even mid career, I think, I mean, how
many how many careers are you going to have in
your lifetime? I mean, I'm thinking about doing more now
because the refresh is a different refresh now because of
the nature of change of technology and markets. So it
took a charge in your learning and bringing that back
is just it's a really good investment.

Speaker 1 (22:49):
Yeah, it is. I agree with you.

Speaker 2 (22:51):
And it's interesting you say you're thinking about doing it again.
I would do it again, even at my age, and
with the world changing the way it is, it makes
sense to keep learning.

Speaker 1 (23:03):
We're with Craig Stobo, newly installed Chair of the Financial
Markets Authority, and we'll be back in a moment. Welcome
back to leaders, getting coffee.

Speaker 2 (23:20):
Our guest today is Craig Stobo and we've been talking
about everything from mountain climbing to American universities. But Craig,
you've been around the financial and investment space for your
entire career pretty much.

Speaker 1 (23:34):
How's the industry changed over that time.

Speaker 3 (23:37):
It's got really efficient.

Speaker 4 (23:39):
And I want to relay a story that comes to
mind as you asked that question. When I was an
economist at d's il COREPS, we would have to go
to Department of Stats and Wellington for the ten forty
five am release of the CI for the CPI. Yeah,
turn up in a room and a guy would come
out at the back door of the room announced the

(24:00):
CPI for the March quarter is one.

Speaker 3 (24:05):
Right, and then.

Speaker 4 (24:07):
Tory Haywood from Favorites Right and myself would race for
the only phone and we would ring to our respective
treasuries to report the CPI. In the days when royces
Woberg now had a delay of about two minutes, so
we had two minutes to inform our dealing rooms of

(24:29):
getting set before the market was made of able the public.

Speaker 3 (24:36):
It's completely efficient and it's.

Speaker 2 (24:39):
A lot more efficient than it was then. I know
you're you're a big Berkshire Hathaway fan. I think I
bumped into you at an airport at one point where
you were on your way to Omaha, Nebraska for the
annual General meeting.

Speaker 1 (24:52):
Tell us about that experience.

Speaker 3 (24:55):
Well, Warren Buffett and Charlie God blessed soule.

Speaker 4 (24:58):
Charlie's part of the world now.

Speaker 3 (25:00):
But what Warren Buffett learned from a guru at.

Speaker 4 (25:06):
Columbia University around you know, value you invested, and that
concept is around thinking about a margin of safety when
you're buying a stop, think about patients of long term,
think about doing your research, ignore the crowds, and keep compounding,

(25:27):
keep compounding your investment. So there's an opportunity to go
to Imaha, Nebraska.

Speaker 3 (25:35):
And I took it.

Speaker 4 (25:36):
And there's a day beforehand where there are several lectures
on different topics, and then you have the day at
the stadium, which is an enormous stadium, and all the
levels are.

Speaker 3 (25:48):
Crowded out with investors in Berkshire Hathaway.

Speaker 4 (25:52):
And then they come on stage and sit down and speak,
and there's a media panel, there's an investor panel.

Speaker 3 (25:58):
I mean, there's general questions all around the stadium and
people ask.

Speaker 4 (26:01):
Them all sorts of questions and Charlie's very dry, and
Warren looks up for Charlie and the boy's got a
bottle of cope and front and they sit in the
cop you know, tell great stories. And they've got a
competition going between Passive Funds and Berkshire Hathaway's returns and
Warren still winning. So he's amazing. But what I really

(26:23):
like about it is you go down to the basement.
You see all the businesses. You see all the businesses
of invested, from the trains business to the candy business,
home building. And what he does is he put executives
into those businesses and he doesn't want to hear from them.
He lets them go and build the businesses. He just says,
if you need capital, give me a call, right, And

(26:44):
it's just a really good, hands off, delegated trust model.
And then he's got the secret. The secret has insurance business.
He's got this enormous premium float, billions of dollars of
what they call float cash sitting there that he can
invest at different points, and he's invested it differently to
the way other insurance comes with normally invest that float,

(27:06):
and that provided enormous benefits from which because they're not
he's not selling. He gets into text benefits as well.
So very smart, very long term. You know, come away
from that thinking how should I do something like that?

Speaker 2 (27:19):
Yeah, the long term nature of it has been the
hallmark of his success. The long term view in a
world where where you know, quarterly earnings sometimes sort of
overtake everything else.

Speaker 4 (27:31):
Yep. And one of the lecturers that Wharton wrote the
book called stocks for the long run. You know, same concept, right,
think about building value and you know it's it's started
as a business. It was looking at cigarette, but virtual
heart would look at little cigarette. But they'll be trade
deals and then they move to a much better philosophy
of thinking about value investing for the long term. So

(27:53):
it's it's played off for them and the investments that
came in earlier. His neighborhood and I'm really investors are
all multimillionaires. But he's still in the same house, in
the same part, after the same diner to have as
lunch or dinner whatever. So pretty humble guy, very much.

Speaker 2 (28:12):
So I guess it's a good entree into the financial
state of New Zealand.

Speaker 1 (28:15):
Right now.

Speaker 2 (28:16):
You know, we've we've got our problems. We're a very
different economy to what we were.

Speaker 1 (28:21):
Sort of just five years ago.

Speaker 2 (28:24):
What are your thoughts on the on the state of
our economy as we sit at the moment.

Speaker 4 (28:29):
Well, we like to characterize ourselves as a small open economy.
We're getting smaller and we're not open. We're not open
to for a direct investment, exports as OBSIDERGP we're only
at twenty five percent. We called ourselves an export or
food to the world, but we don't shoot the lights out.

(28:51):
We have real issues around the state of infrastructure which
needs privacycer solutions. We have an education system that's not
delivering outcomes. It's finally being recognized by the Ministry of Education.
But when your piece are scores, which are exams for

(29:14):
roughly fourteen fifteen year olds, where we were fourth from
the world in nineteen ninety and now we've dropped to
high twenties, you cannot compete unless your students and adults
are able to think conceptually, ask the right questions, add, divide, subtract,

(29:38):
to be able to think about how do we do
things better if we be more productive and.

Speaker 3 (29:42):
Compete with the rest of the world.

Speaker 4 (29:44):
So our activity levels, we're sitting about one point three
percent productivity growth when you add an immigration, actually a
GDP growth and producted is going negative. So I wrote
an article this last week around looking asking business leaders
to look in the mirror and say, actually, isn't it

(30:04):
time we brought him any more foreign businesses who have
got smarter, more competitive ways of working and lift our
productivity with foreign direct investment. And that's a really poor
indicator of our ability to create wealth when we have
an aversion to foreign directing investment, partly cultural, partly driven

(30:26):
by politics, where we don't welcome foreign investment. We spring people,
we say sorry, we have a screening first before you
come in. And you're thinking they're going to bring jobs,
they're going to bring connectivity to the world, they're going
to bring new ideas. Why are screen them as though
we're somehow superior to them?

Speaker 3 (30:44):
What a dreadful attitude.

Speaker 1 (30:46):
Well, it's interesting you've mentioned that.

Speaker 2 (30:47):
I was going to talk about that in opinion piece
and for those of you listening, the headline is Capital
Markets Report, Innovation, Productivity doldrums show business must take a
look in the mirror by Craig's. It's on the New
Zealand Herald website. It's dated the thirteenth of June. You
mentioned you just touched on one of the statistics in
that article that our GDP per capita had fallen three

(31:11):
percent September twenty two, so that's about eighteen or nineteen months.
Is the reason for that all immigration related.

Speaker 4 (31:20):
Or is there more to it than that it was
a treasury number. There's no reason given to it by Treasure.
But it was in the budget, Yeah it was.

Speaker 1 (31:28):
It was in the budget papers.

Speaker 3 (31:30):
Yeah, I just thought it was buried about. You're right,
but no one really picked it up.

Speaker 4 (31:34):
And I twinned that productivity laments from Treasury with a
productivity piece done by NZI New Zealand the Studio Economic
Research saying the same things, and both of them were
trying to link it to different different issues. But it
was a combination of lack of business dynamism, lack of

(31:56):
connection to the world, lack of capital deepening. When we
want to build our businesses in New Zealand, we add labor,
add another person, but actually know how can we get
more output per person not add another person? And that
may be the price of labor here, it may be
excess issues. It maybe our unwillingness to adopt technology really quickly.

Speaker 1 (32:20):
What about their work ethic.

Speaker 3 (32:23):
New Zealanders work long hours, but that's not smart.

Speaker 1 (32:27):
Yes.

Speaker 4 (32:28):
One of the impressions I had where we were climbing
in Peru was we were sitting at a lake at
a base camp before going out Uupaha, and there was
a group of Germans beside us, four German guys, and
they had the latest tents, the latest climbing gear, and
we looked positively tatty as kids in our woolen underwear,

(32:48):
et cetera. And they had six weeks holiday. They had
six weeks holiday from their activities, their business, whatever they
were doing. In Hamburg or Berlin. We had to take
time off for three months to go overseas. So I thought,
that's a very productive economy if they can afford to
let their workers go away for six weeks. And it
stayed with me. It stayed with me ever since. I'd

(33:10):
be very happy if workers want to take time off.
If we were more productive, Yeah, if we did eleven
months of work in ten months, take a month off, fantastic.

Speaker 1 (33:21):
You won't get any argument from me.

Speaker 2 (33:23):
Your article goes on to talk about foreign and foreign
direct investment, and in particular you talk about the example
of Ireland and what they did there with the Industrial
Development Agency, I think they called it, And you're promoting
for New Zealand to do something similar.

Speaker 1 (33:41):
What would it take.

Speaker 3 (33:44):
Well, Ireland was a backward agricultural nation.

Speaker 4 (33:48):
In the late nineteen fifties, very clever, very clever official
government official put a picture in front of government to say,
we have to move outward, we have to think about
transform our economy. And the opportunity was the EU, so
the old European pyle and steel community in those days,
in the late fifteenth of the sixties. So they joined.

(34:08):
But what they did was they took the subsidies from
EU and built an education system, a world class education system.

Speaker 3 (34:16):
They opened up.

Speaker 4 (34:17):
They weren't afraid of their students immigrating, but they how
do we get them to come back? And so over
time they enabled a welcoming attitude to foreign direct investment.
We're by large, pharmaceutical companies, chip making companies, all sorts
of global multinationals come to Ireland. And of course it's

(34:40):
not obvious until you think about it, but Ireland is
the only English.

Speaker 3 (34:44):
Speaking country in the EU.

Speaker 4 (34:48):
Because England has left, yes, of course, right, and Ireland
has a very special relationship going back to the end
of the troubles and earlier with America. Now there are
twenty six presidents that call themselves Irish. Is thirty I

(35:08):
think thirty five million Americans who have Irish ancestry. But
that's the ASPRA. We've got a Deasper too. The ASPRA
went out and still has these really strong links back
to home. At the same time, they decided to drop
the tax rate for multinationals to a recorded a corporation
tax to twelve and a half percent on their income,

(35:29):
and that's attractive. That's a large reason why they come.
Second large reason because of what they've done in education
is access to high quality students and workers who are
well educated, a well educated workforce. And so you have
this phenomenon where the little villages that we were, towns
that we visited on our New Zealand Initiative trip to

(35:50):
Ireland was one where the towns wanted a multi national
to come because that created jobs that paid rates their
GDP per cap it and Ireland roughly the same population
of five million people in nineteen ninety was the same
as New Zealand. Now the two and a half times
more if you adjusted for the multinational tax revenue. Ireland's

(36:15):
got a surface. We don't have a certain you've adjusted
for that that's still be ahead. It's an incredible story
of taking advantage of some things that they have others don't.
Here now, we are English speaking, we have strong privacy laws,
strong judiciary.

Speaker 3 (36:33):
Our closest neighbors are Australia and Asia.

Speaker 4 (36:37):
Also, we're also hopefully still got a great set of
well qualified workers. And we've also got a renewable energy system.
So if you were to access or promote or welcome
through an equivalent to the IDA, yes, the Irish Development
Agency an equivalent equivalent, you would be welcome those sort

(36:57):
of businesses to come down here and use our electricity
green eletricity. The IDEA has many offices around the world
where they're trying to find those businesses. When I look
and the article talks about it, we look at our
usual on trade and enterprise, there's a qualifier around, well,
we're not too sure we want to welcome. We'd rather
use local dispersed. I think, oh, there we go in

(37:17):
a nutshell. Officials aren't around the right way, and our
screening system at the Overseas Investment commission is about strategy
and the right sort of people. Who are we to
judge on the right sort of people? I mean, it's
quite arrogant. It's a very different addustry so culturally and
some of those macro settings.

Speaker 1 (37:36):
Need to change. So to do that you need the
political will. Is that political will there well not?

Speaker 3 (37:46):
I think you look at the combination of the coalition.
Certainly on the other side of the fence. The previous.

Speaker 4 (37:55):
Government made it quite difficult with previous changes pardon me
to legislation, some of which was rushed through our day. Yeah,
the current the current government would would be more open.
Can they get together? There is three components that coalition
to agree to this. Someone's got to lead.

Speaker 1 (38:15):
Yeah. Yeah, Like anything it needs, it needs a leader.

Speaker 3 (38:20):
It needs a leader.

Speaker 4 (38:20):
And you need to have ambition, Like you just need
ambition about where you want to be and paint a
picture of what could happen to create opportunities for you know,
the generation coming behind us. And you know, if you
have an opportunity you don't take it, are you going
to get thanked by the next generation or not?

Speaker 1 (38:38):
Yeah?

Speaker 2 (38:39):
Good points. The world's in a funny old place at
the moment. There's the Palestinian conflict, the Ukraine, what every
day is becoming a more and more remarkable presidential election
in the US, the immigration crisis hitting Europe. In the USA,
we're now seeing the surge of right wing parties in

(38:59):
Europe on the back of that immigration crisis, and all
that stuff flows.

Speaker 1 (39:05):
On to impact the financial markets.

Speaker 2 (39:07):
How do you see that, and in particular the impact
on New Zealand and our economy, our competitiveness, our currency
and so and so on.

Speaker 1 (39:17):
But yeah, there's a lot in that, I know.

Speaker 4 (39:19):
But yeah, sure, so we're a trade dependent, yeah, independent
sovereign power. Were heavily in debt, so we need foreign
investors to buy our bonds to fund our debt.

Speaker 3 (39:37):
So we tend to do two things in that area.

Speaker 4 (39:40):
We like open transparent markets for raising debt to finance
our deficits. But we've got to compete with others around
the world, so we have to improve our domestic physical settings.
Because the credit rating agencies are always watching, aren't they
around the trajectory and the recent budget has us not

(40:01):
into surface to twenty seven twenty eight. In the meantime,
we're borrowing another twelve billion dollars this financial year, so
not a good trend. That's the first point. The second
point is that we have to be part of a
multilateral world. We cannot be part of a biolateral world
where we're doing deals.

Speaker 1 (40:20):
On the side.

Speaker 3 (40:21):
We need that will trade organization to work. We need
the UN to do their best to promote peace.

Speaker 4 (40:28):
If our goods and services have to travel through the
sewer's canal, but they can't travel because of little least
the CONFLICTX, what happens, freight makes go up and that
costs US at an exporter. So we have an interest
in solving the Middle East issue. My view is we
would like to see an end to Gaza and the
West Bank, and we would like to see a regime

(40:49):
put in place to govern those areas. And it's in
our policy a two state solution, an Israeli and a
Palestine side by side, and that's in our on both sides.

Speaker 3 (41:01):
What's frustrating is Norway and Ireland.

Speaker 4 (41:04):
I think Spain had come out in the last two
weeks asking for a two state solution now and we're
demuring a little bit on that around timing, and we
agree with the direction, but we would rather see the
conflict resolved before pushing two states, but I think we
should be saying that clearly. We think both people can
live side by side.

Speaker 3 (41:22):
We want peace. Because we're a trader, we need to.

Speaker 4 (41:26):
So the thing that influenced us in financial markets, underneath
all of that really is what's standing and goods and
price goods and services inflation all around the world, US
inflation and how that impacts US.

Speaker 3 (41:39):
US inflation so in New Zealand and the trajectory for
interest rates.

Speaker 4 (41:43):
So in the case of Australia, US and New Zealand,
we've got central banks that are holding rates higher for longer.
Getting a little bit of cuts in Canada and the
EC you, but not here. So we have a challenge
around productivity. Be the financing a deficit issue. We have
an education system that needs to be reformed and we're

(42:05):
waiting patiently from straits to come down. In the meantime,
it's really hard for people. Cost of living is severe
and incomes a difficult when you've got rising in unemployment.

Speaker 2 (42:17):
Gee, it's not very cheery. I think we've better take
a break. We'll be back with Craig Stobo shortly back
with the new Chairman of the Financial Markets Authority Craig
Stobo and Craig, I want to talk about the FMA,

(42:38):
but before I do, I note that you're also the
chair of the New Zealand Local Government Funding Agency and
the great majority of our listeners probably don't know what.

Speaker 1 (42:48):
That body does. Can you just explain the activities of
the LGFA.

Speaker 4 (42:54):
Yeah.

Speaker 3 (42:54):
So it's a.

Speaker 4 (42:57):
Organization established in twenty eleven, the establishment chair and the
inaugural chair. It's eighty percent owned by thirty councils and
twenty percent owned by the New Zealand government, and its
job is to raise debt capital around the world and
lend that cash to councils who use it for their

(43:18):
capital expenditure. There are seventy eight councils in New Zealand
and we lean to seventy seven of them. We'd like
to lend to the Chatterm Islands, but we haven't quite
managed to nail that one yet. Everyone else is a member.
It's voluntary, it's not compulsory. And because of our capital
structure and proximity to the government through ownership and other

(43:40):
means of support, we have a triple A credit rating,
which is the same as a New Zealand government and
that means we can borrow in New Zealand dollars or
Australian dollars, short term paper or long term bombs, very
very efficiently, at a very cost effective basis, take a
small margin to service the costs of our organization and
to build retained earnings for capital and ensure that our

(44:04):
councils are well financed. So starting from scratch and twenty
twelve with our first tender to the markets, we're now
a twenty billion dollar balance sheet. We're a significant player
in New Zealand system with the larger largest issue of
bonds after the New Zealand government. About thirty five percent

(44:25):
of our bonds approximately held by offshore investors, so sovereign
wealth funds, central banks, pension funds all around the world,
by New Zealand local government agency bonds because they have
a very strong credit quality and our price slightly above
and yield terms from the New Zealand government. So it's

(44:46):
a very very good part of the New Zealand financial system.
But as you said, it's kind of wallpaper. No one
really knows we're there, right, We're just in the background,
and that's the way we should be. We just get
on and do it do our business helping our members
raise debt on competitive instruct terms.

Speaker 2 (45:02):
Well, if something's working really well, you don't hear about
it very often. So, but there's a whole lot of
people out there now who've listened to your explanation, who
probably know more about it than they than they otherwise did.
Let's talk about the FMA, your new role as chairman
of the Financial Markets Authority. A lot of listeners won't
fully understand what the authority does, and so would you

(45:26):
just like to enlighten them?

Speaker 1 (45:28):
Perhaps?

Speaker 4 (45:29):
Yes, you may recall the old Securities Commission. Yes, So
the KMA is evolved from the Securities Commission that operates
under its own act. It has a purpose of facilitating
and developing Mu Zealand's financial markets through the lens of fairness,
transparency and efficiency. In some senses, you can call us

(45:51):
the Conduct Regulator New Zealand. We have a twin peaks
with the fee system reserved back in New Zealand. Who's
responsible for Monty policy is also responsible for prudential supervision
of our banks and insurers, making sure they're well capitalized,
for example, well governed, as THEMA is across banks, insurers, auditors, brokers,

(46:14):
fund managers, financial advisors around conduct how they conducted, making
sure that perception of what they do is also reality.
So I've only been in the job of a couple
of weeks, so I'm still learning a little bit my
mountain climbing days.

Speaker 3 (46:31):
Brew it's a very steep ascent.

Speaker 1 (46:35):
I was going to ask.

Speaker 2 (46:37):
I was going to ask, what is it when a
new chairman comes in, like a new chief executive, there's
usually challenges ahead.

Speaker 1 (46:44):
What do you see as the challenges in that role?

Speaker 2 (46:48):
Uh?

Speaker 4 (46:49):
Well, patience because others have gone before the incoming CEE
or the incoming chair So listen to where the issues
are and then figure out where we want to go
to a little bit like noun climbing, we do want
to go to and why and will that make a difference.
It's the key thing here is that we have a

(47:11):
very clear purpose under the Act that everything we do
has to be with that particular purpose.

Speaker 3 (47:17):
So we know why we're there.

Speaker 4 (47:20):
The hard thing is how do we do that? And
when you look at repertory economics, one of the key
issues is how you do things. And I'm still learning
about how the ecimy does things, So I guess kind
of watch this space. What does somebody like what does

(47:41):
somebody like you bring to a role like that? She
probably have to ask the minister who's appointing directors to
the role.

Speaker 1 (47:51):
Well, what do you hope to bring to the role?
That might be a better way of asking.

Speaker 4 (47:56):
Yeah, well, I've come from the business side of the fence,
haven't i. So I've been part of businesses that have
been regulated by the FMA, So I see impact of
what they do to assist investors and consumers and businesses,
and being on the other side of the fence, you're
thinking about why, but not why, but how they.

Speaker 3 (48:19):
Deliver those things. So to the challenges that the ACTS.

Speaker 4 (48:22):
Says, we are we fair? Are we efficient? Are we
transparent in our leadership? So you kind of use that
as a as a guiding light, don't you. So I
think the first thing is to listen to others I've
talked to all the directors will need to hire more
directors than due course, so there's some governance pieces and

(48:44):
working with the CEE and the team who are doing
their best as you would expect to deliver those outcomes.

Speaker 2 (48:52):
On the face of it, I would probably say that
the New Zealand Financial sector conduct itself pretty well relative
to some of its counterparts elsewhere?

Speaker 1 (49:04):
Would that be a fair assessment?

Speaker 3 (49:08):
Underlying that comment is a comparison issue.

Speaker 4 (49:13):
Yeah, how do you share yourselves with the Australian system
of ESSEX and APRO? How you compare yourselves with FSC
and UK or the equivalent in the US. I think
that's a great change to think about.

Speaker 2 (49:26):
How do we know that?

Speaker 3 (49:28):
Yeah, I don't have an answer to yet.

Speaker 1 (49:30):
Yeah, and don't. I don't know why I think that.
It's just my sense.

Speaker 2 (49:34):
As I said when I threw the question at you.
We've talked a little bit about the New Zealand economy
and the state of the world. We haven't talked much
about leadership, and you've obviously evolved over your career into
a leader with all sorts of experiences.

Speaker 1 (49:55):
What's your earliest memory of being in a leadership role? Hm,
I was.

Speaker 4 (50:04):
Asked to be This is primary school days. I was
asked to be the king in a play, right, and
and then I.

Speaker 3 (50:13):
Got the measles. I couldn't I couldn't be the king.

Speaker 4 (50:16):
I was very disappointed, but nothing I could do about
it because it was taken away from me. I guess,
but following on from that intermediate school leader of Blue House.
But I didn't understand why I was asked to be leader.

Speaker 3 (50:28):
I just yeah, okay, okay, we'll just.

Speaker 4 (50:30):
Do what you do, and saying through school leader leaders
of a house, Sublan house at wai.

Speaker 3 (50:37):
Teki Boys, it just kind of falls naturally. I just
I don't know why.

Speaker 4 (50:41):
It's just easy and it's an obvious thing to do
to gather resources around you and ask whether you can
help out, and if you help them, they generally help
you back. And it just grew. So I don't have
a strong answer for that. I think, see you're earlier
coming around being curious. There's a there's a piece, there's
a strong piece around energy, really important around energy. I

(51:05):
know if I was to walk into a boardroom with
a difficult and I've done this with a difficult dilemma
in the boardroom to resolved, and this on this occasion
with people on screen as well as in the room. Yeah,
I gave I gave you one in the room a
big pig unusual, right, unusual, quite surprise and that stand
off and what was it challenging to our meeting and

(51:27):
prospect to half an hour? So I think I think
you always trying to solve things, aren't you. You have
a problem, but you need to twin it with a solution.
And so part of the issue with a leader is
thinking a little bit further ahead than others around where
things may go and what have we got to solve

(51:48):
that particular route, that particular pathway, So that that time
out to think about where things could go and solutions
and who you need around you is quite important. So
you you don't live in the moment, which is tough.
Sometimes you're always future focused.

Speaker 2 (52:06):
Yeah, and then I think beyond that, and I'll be
interested in your view on this, the ability to get
things done.

Speaker 1 (52:11):
Because there's lots of people that talk about stuff. Are
you that guy?

Speaker 4 (52:18):
You won't see me on the media while this is unusual,
I suppose at this month I'm not on social media.
I'll do opinion pieces luck you spoke about because I
had a particular view, But I'm about getting stuff done,
so whether it's building algae, basically I'm a patient, expanding leader.
I like building things, but I don't need to be
I don't need to have accolades, I don't need to

(52:38):
be recognized that the recognition is getting stuff done. So
talking frustrates me because I'm not very good in committees.
Committee of one is great, but not committee where you're
going around circle. So I find that frustrating. So, yeah,
I have some patients up to a point and then

(52:59):
I have to leave or convince others to move forward.

Speaker 1 (53:02):
It's your comment. Committee of one reminds me that an
old client I had.

Speaker 2 (53:07):
I used to work in the UK for a consulting
organization and one of my clients was Compact Computer. You
might recall Compact Computer, which ultimately sold into Yulitt Packard.
And I had this client who was the European head
of Compact Computer, and he had this saying that that
getting the team together to make a decision was fine,

(53:27):
but he felt that the best decisions came when when
they were made by an odd number of people, and
three was too many. So what's been what's been your
most important leadership lesson?

Speaker 4 (53:42):
Uh? Well, when I was before I went to Burt
in business school, the been the leadership team at WISPAC,
which OWNBT Funds at the time. He asked me if
I'd ever had a mental because I've built co built,
not just me, co built PT Funds from scratch to
three billion dollars and the accolades you mentioned and seventy

(54:05):
starve and or did you have someone that you admired
or was a mentor? I said no, there was no
one in the markets that knew about funds management the time.
What I did do was what I did do was say,
the Australians are doing a great job, the FED funds
in Australia.

Speaker 3 (54:17):
How do we learn from them?

Speaker 4 (54:19):
And so you could say that that that team over there,
both on the investment banking side and the fund side,
was I admired them a lot and thought I'd replicate
stuff in New Zealand. The second is the second lesson
was on a subsequent senior leadership team camp up the
Hunter Valley, we were given some tasks to do and

(54:39):
my little team had to design the system for epistating
off a cliff, and they I said, well, I've been climbing.

Speaker 3 (54:45):
Around the world a little bit.

Speaker 4 (54:46):
I might be able to figure this out. So I
started doing it. But everyone el stood back yes, because
I thought that I was the expert. But I built
it wrongly and we didn't get a team down. And
I felt pretty bad about that because I hadn't included
I hadn't included them. They thought I was the expert, but.

Speaker 3 (55:06):
In fact it proved that if they had had been able.

Speaker 4 (55:09):
To help me, would have figured out what I was
doing wrong, and so we failed as a team. But
tells you that the committee of one sometimes doesn't work
and you're better off.

Speaker 3 (55:20):
You're better off finding others around you who are better
than you are.

Speaker 1 (55:24):
My parents always said two heads are better than one. Yeah,
it's a good list. It's a good Listen. What's your
best leadership skill, Craig Patience?

Speaker 3 (55:35):
Yeah, that's my super power.

Speaker 4 (55:37):
Patience, is it?

Speaker 1 (55:38):
See I'm not patient. I'm impatient if I'm being honest.

Speaker 2 (55:45):
So, so you're sitting in a room full of people
and you're you know, you just talked about taking people
along with you. You're sitting in a room full of people,
and you're happy to have let everybody have their say
and try to get to the right solution.

Speaker 1 (55:56):
Even when you think you know where you're going to go.

Speaker 3 (55:59):
Is that you I?

Speaker 4 (56:03):
I think I know where the conversation's going to end up. Yeah,
what I don't know is how long it's going to
take to get there, because people have to have your say.
When you start working through the issues that they bring up.
You get there and you're stronger for it because you
get the whole team going with you. It's just how
long that takes. And if that process doesn't work, that's
frustrating and I kind of bail out, Yeah, or try

(56:25):
another tack.

Speaker 3 (56:25):
But yes, you need to have a viewer.

Speaker 4 (56:28):
Weird life to end up in your head unless you're
challenged with a really, really good quality argument on the
other side. Most of the time it's helping others see
the bigger picture, get the issues on the table, and
say this is the way forward, and generally you're stronger
for it.

Speaker 1 (56:42):
Yeah, I agree, I wish I wish I was better
ant it.

Speaker 2 (56:48):
As you've built the various businesses, you've obviously recruited people
over the over the years.

Speaker 1 (56:53):
What do you look for in the people you're recruiting.

Speaker 4 (56:58):
Yeah, I've got hired some great CEOs. When you look
at people CVS, you see a series of skills and
you read out mine earlier on Actually, Bruce, you don't
know me. You don't know me as you don't know
when the crap it's the fan react. You don't know
whether you can sit down and have a beer with me.

(57:20):
So when I look around the board table, I see humans,
not a set of skills. And I'm thinking, your perspective
is determined by your position in the universe, isn't it?
And we all come from different positions. So can I
please get diversity of perspective. I don't care what color
you are, what age you are, what your ethnic background,

(57:42):
your religion is, or your sexual creckers, I don't care.
I want to know what your perspective is. And I
got different perspectives. So when I look at a landscape
with my team and one person looks at the nail
on the fence on the gate in front of us,
the other two are looking over the horizon that what's
behind the horizon and the valley on the other side,

(58:03):
I now got diversity of perspective.

Speaker 3 (58:05):
I want that.

Speaker 4 (58:06):
That is really hard to interview. For in aun interview
situation with a CD with skills on it, you don't
know that the person that's that's the skill, the human skill.

Speaker 2 (58:17):
What you're also highlighting is is what somebody said to me.
Once you put you put teams together one at a time.

Speaker 3 (58:26):
Yeah, yeah, yeah, building blocks.

Speaker 2 (58:28):
You're right, yeah, because you don't yeah, you don't know
what you've got until somebody's in there and starting to operate,
and then you can decide what you need for the
next one.

Speaker 1 (58:38):
It was a great piece of advice.

Speaker 4 (58:40):
Yeah, I think the best place to work there, parlaid
way back was driven by that building block approach to
the point where I didn't have to say anything.

Speaker 3 (58:47):
It got done. The culture was one of doing stuff.

Speaker 4 (58:50):
It was It was very.

Speaker 3 (58:51):
Aspirational culture where if you weren't in that.

Speaker 4 (58:54):
Mode, it was like anit from an orange, you just
get squeezed out. You just wouldn't.

Speaker 3 (59:00):
But with that group you could do lots of things
together and really really important.

Speaker 4 (59:05):
You've got to have fun. It's not fun why you're
doing it? Absolutely rely.

Speaker 1 (59:11):
I couldn't agree with you more.

Speaker 2 (59:13):
What would you say to anybody, any young fella, young person,
young man or woman considering a career in the finance sector,
what would you tell them?

Speaker 4 (59:24):
Well, learn fast, learn really fast. You're going to do
the preparation, some people say, and I think there's a
degree of truth in that. You know, sometimes you're lucky.
I mean, things happen and it's luck, it's not skilled.
You're there at the right time and right place. So
you can't say it's your skill, it's just luck. But
be a little bit humble about that. But there was

(59:45):
a Nobel Prize chemist I think it was, who said,
you know, luck has not to said preparation.

Speaker 3 (59:51):
You haven't done the prep. You don't see the luck
going guy. I quite like that.

Speaker 4 (59:55):
Analogy, and so that working hard, piece learning and being yours.
I mean not just in financial services, that could be
in healthy education.

Speaker 3 (01:00:04):
The same sort of thing.

Speaker 4 (01:00:06):
Have that curiosity, open every door, you don't know what's
behind it, Open every door and have a lot.

Speaker 2 (01:00:13):
There's some great lessons in those, in those discussions, all
those comments about leadership.

Speaker 1 (01:00:19):
Craig, thank you.

Speaker 2 (01:00:20):
I've only got one more question, and I think you
probably know what it is. If you can beat the
New Zealand Prime Minister for a day, what's the one
thing you'd like to do?

Speaker 4 (01:00:29):
Ask for two days? Okay, so I give you two days.

Speaker 1 (01:00:34):
What are you going to do.

Speaker 3 (01:00:36):
Well? I'm as you can tell with.

Speaker 4 (01:00:40):
Business advisory work for Targo Business School and tech you
Voice High School and the other fund, I've got a
pretty strong interest in education because that certainly helped me.
So I would argue the most important thing we can
do is to have every single child in New Zealand
at your early childhood education or at primary school full

(01:01:00):
time compulsory, bus up stair compulsory.

Speaker 1 (01:01:06):
You can do that in the day.

Speaker 2 (01:01:08):
Good Yeah, fantastic. Well, crag Stobo, you've been our first economist.
We haven't had an economist on leaders Getting Coffee before,
so given the New Zealand media's love.

Speaker 1 (01:01:23):
Affair with economists sometimes.

Speaker 2 (01:01:26):
After we've done well to go twenty two episodes before
we have our first economists.

Speaker 1 (01:01:30):
So I'm delighted that you've been with us.

Speaker 2 (01:01:33):
That chat on the road side during the Iron Man
was absolutely worthwhile given that this is the outcome. Thanks
for joining us on leaders Getting Coffee episode twenty two,
and thank you for sharing your perspective on the state
of our little country and the leadership experiences everything from
mountain climbing to the boardroom. Like all leaders, your experiences

(01:01:55):
are unique and we certainly appreciate the opportunity to listen
to your views.

Speaker 1 (01:02:00):
And finally, good luck in the new role at the FMA.

Speaker 3 (01:02:03):
Thank you Bruce the pleasure to talk to you. Have
a good day and good fun.

Speaker 2 (01:02:08):
Finally, folks, my leadership tip of the week given me
had a bit of a financial theme today, I thought
i'd share a financial tip that I talk to people
a lot about. Three simple rules from a financial perspective.
You don't need to sit down and spend hours on
this stuff. But number one, get your monthly results out
as quickly as you can, ideally within seven to ten

(01:02:30):
days of the end of the month, or too often
I see businesses that are in strife and I ask
for a set of financials and they give me a
set of financials that are a couple of months old.
So rule number one, you get your monthly results out
as quickly as you can. Rule number two, make sure
you have a budget for your business, and ideally that
budget should be agreed in advance with the people that

(01:02:51):
are responsible for helping you achieve it. It's no good
if your sales team don't believe in the budget. You've
got to take them along for the ride. As we've
just been listening listening to Craig talk about and so
when we put the budget together, make sure the people
responsible for achieving it are aware of it and across it.
And finally, especially in the market we're in at the
moment where we miss the odd budget or we don't

(01:03:14):
things don't quite go the way we think.

Speaker 1 (01:03:16):
Constantly refecast the outlook for your business.

Speaker 2 (01:03:19):
In other words, constantly be looking at what's happened here
to date and what you think is going to happen
in the next few months, and make sure you can
plan accordingly. So get your accounts out quickly, make sure
you've got a budget, and constantly refecast. That's my leadership
tip of the week. And that's about it from us.
We're going to take a break for a few weeks.
We'll be back in late July with another series of episodes.

(01:03:42):
We've still got plenty of great leaders to talk to
and a few very interesting people lined up, So thanks
again for joining us on leaders Getting Coffee Episode twenty
two with Craig Stobo, and don't forget to check out
those articles.

Speaker 1 (01:03:56):
My one on the eighth of June We.

Speaker 2 (01:03:58):
Need a Long Term Plan for New Zealand and Craigs,
which appeared on the thirteenth of June, also in the
New Zealand Herald, Capital Markets Report, Innovation Productivity doldrum product Sorry,
innovation productivity doldrums show business must take a look.

Speaker 1 (01:04:13):
At the mirror.

Speaker 2 (01:04:13):
Of course, if you've got any feedback, Please get in
touch and info at leaders Getting Coffee and remember that
our favorite charity is Bike for Blokes dot co dot Nz.
And we'll see you next time when we get back
from our break with another terrific leadership story. Until then,
have a great couple of weeks and we'll catch you
next time.