The chair of Te Whatu Ora/Health NZ and the Environmental Protection Authority says his criticism of National's three waters policy announcement was made "as a private citizen".
National wants water infrastructure to be returned to the control of local councils, with a requirement councils pay to upgrade infrastructure.
Posting on LinkedIn, Rob Campbell, said he thought National's policy was a thin disguise for the dog whistling on co-governance.
"What on earth would make anyone think this was a sensible idea for debt raising alone, let alone the management and delivery of the tasks," he wrote.
Under the Public Service Commission's code of conduct, directors of Crown Entities are supposed to act in a politically impartial manner.
When asked by RNZ how his comments sat with his role as a board chair, Campbell said "it is what it is" and did not believe these needed clarifying further.
Prime Minister Chris Hipkins said he believed Campbell's comments were "inappropriate" for someone holding such roles.
"I think that some of the public commentary that he has made steps well outside of the politically neutral stance that we would expect of someone holding a Crown Entity Chairs position."
It was a natural justice issue and there was process that needed to be worked through with Campbell, Hipkins said.
He would not be drawn on whether Campbell was fit for the role.
"I do think his comments were inappropriate for someone holding a role such as the ones that he holds in terms of Crown Entity chair. There is a code of conduct around political comment by people who hold those roles and his comments fall well outside that."
It was ultimately a matter the ministers responsible would be raising with him, Hipkins said.
ACT leader David Seymour said Campbell needed to "pull his head in or resign".
"The Public Service Commissioner, Peter Hughes, needs to take a tough line on Campbell and other public servants who can't act in a politically neutral way," he said.
A spokesperson for the Public Service Commission said they had no comment at this time.
It is not the first time Campbell's LinkedIn comments have come under scrutiny.
Last August, he voiced his support for Green MP Chloe Swarbrick's Sale and Supply of Alcohol (Harm Minimisation) Amendment Bill.