Former Speaker David Carter says he has "no confidence" in National Party president Peter Goodfellow to turn the party's fortunes around.
Carter retired from the party's board on Sunday morning after failing to topple Goodfellow as president.
"I haven't enjoyed my nine months on the board and I have no confidence in Mr Goodfellow as chair as that board. Therefore it would have been inappropriate for me to remain," Carter said.
On Saturday night, Carter told Goodfellow it was his intention to challenge him for the presidency.
On Sunday morning, the party's nine board members met and elected Goodfellow over Carter.
Carter said Goodfellow had not learned from the review of the party's disastrous 2020 election.
"The review we did after the election raised two significant points: the governance of the party from board was dysfunctional, and second, we did not have enough money in our coffers to campaign," Carter said.
"I don't think either of those things will change while Mr Goodfellow is president," Carter said.
"The fortunes of this party will not change until there is change at the top," he said.
Former party leader and Prime Minister John Key said he was "surprised" Carter had decided to leave the board so soon.
Key, who was a strong backer of Goodfellow during his own time as leader, backed him at the conference.
"There's a huge amount of goodwill towards Peter," Key said.
"He's been in the position for a very long time he knows the history of the party and worked really, really hard," Key said.
Speaking after his reelection, Goodfellow made a plea for unity.
"Our party is the strongest when we work together as a team and reflect and represent the broad church that makes up our Party membership across New Zealand," Goodfellow said.
"I'm proud to note that our board is now equally reflected in men and women, and party members have elected our first Pasifika representative to our board," he said.
Carter's retirement opens up a place on the board which will be filled later this year.