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Self regulation or external watchdogs?

September 17, 2012


What  is the right relationship between ethical regulators and the people they regulate? Why should there be an external regulator to enforce ethical standards? Shouldn’t people want to behave ethically just because it’s the ‘right thing to do’? 

Some people have told us that certain organisations or industries cannot be regulated except by their own members, because it is impossible for outsiders to understand their work.  This has been the media’s view, which was why the Press Complaints Commission was a self regulatory body – but Lord Justice Leveson is currently formulating his views on the effectiveness of that particular system… Even post-expenses, MP’s are self-regulated to a degree – at least in terms of sanctions.  It is also the view of local government, which considers it has a responsibility to ensure the ethical behaviour of councillors and staff as part of its democratic accountability.

The trouble is that even if an organisation is really good at regulating its own standards it’s difficult to get away from public cynicism about self regulation.  There are always going to be additional risks where people are asked to form judgements about their peers. 

The other model is independent scrutiny  something which Nolan advocated and the Committee has continued to champion. Setting up an independent regulator is often seen as a quick win in response to an ethical scandal. But not neccessarily the complete answer. People still have to take responsibilty for monitoring and enforcing standards in their own organisations outsourcing that job to an external body risks a perception that the responsiblity for standards has been exported too.

Where there is external regulation it is obvious there needs to be good understanding on both sides – ‘the regulated’ need to understand what standards they are required to meet (codes and guidance can help here) and the regulator needs to appreciate the risks of the context in which ‘the regulated’ are working and the challenges they face.  Independent bodies have to work harder to build their relationship with the people they are regulating.  The new term ‘regulatory partnership’ is an interesting one.  Should they be partners or is that too cosy?

How can the best balance be achieved here?  Can you give us examples of regulators who have got this right and really understand the sector they are regulating?  Are there organisations who appear to regulate their own ethical standards really effectively?  We’d love to hear more.

Denise Platt


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