The Importance of Regulation & the Benefits of Regulatory Reform – Mark Dean

Following our previous work on regulation, we sought to further explore the topic in order to understand the extent of the need for regulatory review and reform. We spoke to long serving ex-civil servant and learning professional Mark Dean, who has focused his expertise on leadership in the regulation industry, competition and markets, and is the Chair for the upcoming 2017 symposium on international regulatory affairs – ‘Better Regulation for Better Results’.

Mark’s involvement in leadership, diversity and equality learning dates back to 1998. He has both led and contributed to leadership programmes for UK civil servants at all levels, led negotiation on internationally mobile projects in the UK’s Department of Trade and Industry, provided technical advice to procurement panels, and assisted organisations with their strategic business plans. As former Director in the UK Government Department for Business Innovation and Skills, Mark was responsible for a unique joint public-private sector consortium for several years which recieved “Vision 100” Award. Mark has also provided advice to several government departments on HR reform. 

Who do you believe should be concerned by regulation?

If you take a look at some of the papers, they are absolutely full of articles about regulation, whether these concern the food that we eat, products we buy, energy we use, water we drink, health and safety of the transport that takes us to work, hours we work, pay we receive or leisure activities we undertake when we get home. All of these things are covered by regulation in one way or another.

Who should be concerned? Well, of course regulators, of which there are thousands internationally. But regulation should also concern those with a day-to-day or vested interest in regulation and its application – politicians, for example, who can see both the positive and negative effects of regulation in their electoral success and by what they are seen to have achieved while in office.

But I think it is important to emphasise that regulation is far too important to just be left to the regulators. As Jim Gower said, regulation should not be set at such a level that people are expected to achieve the impossible task of sustaining reforms from their own folly – we all need to be concerned with regulation to really understand the responsibility we have for looking after ourselves, and to ensure we do not take for granted the protections we think we may get from regulators.

Why do you think regulations matter?

I think some of the time it is quite obvious why regulations matter. If, say, an individual wanted to buy a pension, or some other complicated financial product – one that they are most likely not familiar with and would not have the skills or know how to be able to make the right decision for their needs about – regulation is very important in terms of providing protection for the interests that you are protecting. We can reasonably expect that we would have some protection from regulation to ensure we do not find ourselves suffering in the long-term.

But often the necessity and importance of regulations is less obvious – for example, when buying a familiar product, perhaps one purchased regularly, like potatoes. Everybody knows what a potato is and what they are like – so perhaps regulation wouldn’t matter here? But how can we know the pesticides that those potatoes have been grown in is healthy for our consumption? How do we know that the ground they have been grown in hasn’t been contaminated by some form of pollution, or dumped waste? Do we know that the water they have been washed in is pure, or that they haven’t been grown by people employed under slave-labour conditions? Maybe it isn’t a question of why they matter, but who to.

For all of these reasons, and many others, regulations matter, and people’s lives are much more effective as a consequence. But regulation does need to be effective. If things go wrong – and regulatory failure is quite common – the effects can be catastrophic.

Ideally, regulations and the regulators overseeing them should be aiming to support and incentivise desirable behaviours by all those involved, and should encourage businesses in particular to adopt ethical practices.

But regulation isn’t always the answer, and we should be sure that regulation is actually the answer to our issues through a cost-benefit analysis. Can our desired outcomes be achieved by regulation, or other non-regulatory or self-regulatory bodies or approaches? And lastly, any regulation or enforcement must need to be implemented in a proportionate, targeted, consistent and highly controlled manner.

What do you consider to be some of the potential benefits of regulatory reform?

When considering the potential benefits of regulatory reform, it is key that I highlight that it is important that any regulatory reform that is to be successful must take a considered approach. That means fully understanding the challenge you are facing, where you are currently and where you would like to go. It means consulting and involving all stakeholders so that they can understand their role in the reform process, can agree on a clear outcome, and know whether this can be achieved or not. I think importantly – and this is sometimes missed – it is key that you understand the environment you would like to implement reform in, and what may need to be developed to allow it to happen: what is possible in the current system, what isn’t, and your role in that. And you need to have a strong focus on implementation, in which consultation is key – make sure that those at the front line of regulation know what is required of them when they sign up to the process.

When done properly, regulatory reform could lead to all or any of the following benefits; economic growth and competition, more advisers and consumers, a strengthened ability to pick up on developments in the market, better enforcement, lower costs for both regulators and the regulated and enhanced cooperation between the two, a continuous improvement in standards, reduction in criminal activity and corruption, improvement in market confidence and confidence in the regulators themselves, quicker decisions, and better cooperation between regulators.

 

 

 

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