Self-regulation or Legislation?

Calls for legislation are predictable by pressure groups. Can corporations effectively regulate themselves or is more reform needed (standards, codes, regulations, policing).?

'(UK) government is very much a spectator, content to leave it to the City to sort out its own problems'.

Prentice 1993

Why should Government believe that self-regulation is best for ensuring good corporate governance?

We (the government) think the system of self-regulation to be a workable one. But if there are more scandals, more breaches of law, then we shall have to think of introducing more legislation .

Neil Hamilton
(Min. for Corp. Affairs)
at a conference

• Legislation encourages but does not guarantee behaviour. No system of regulation is complete.
• Prescription might stifle business creativity
• Legislative change is slow and administratively expensive.
• Self-regulatory change is cheap, quick, dirty.

OHP 18 on Ethics and Corporate Governance