Industry self-regulation is the process whereby members of an industry, trade or sector of the economy monitor their own adherence to legal, ethical, or safety standards, rather than have an outside, independent agency such as a third party entity or governmental regulator monitor and enforce those standards. Self-regulation may ease compliance and ownership of standards, but it can also give rise to conflicts of interest. If any organization, such as a corporation or government bureaucracy, is asked to eliminate unethical behavior within their own group, it may be in their interest in the short run to eliminate the appearance of unethical behavior, rather than the behavior itself, by keeping any ethical breaches hidden, instead of exposing and correcting them. An exception occurs when the ethical breach is already known by the public. In that case, it could be in the group's interest to end the ethical problem to which the public has knowledge, but keep remaining breaches hidden. Another exception would occur in industry sectors with varied membership, such as international brands together with small and medium size companies where the brand owners would have an interest to protect the joint sector reputation by issuing together self-regulation so as to avoid smaller companies with less resources causing damage out of ignorance. Similarly, the reliability of a professional group such as lawyers and journalists could make ethical rules work satisfactorily as a self-regulation if they were a pre-condition for adherence of new members.
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Industry self-regulation in the context of Regulation
Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For example:
- in government, typically regulation (or its plural) refers to the delegated legislation which is adopted to enforce primary legislation; including land-use regulation
- in economy: regulatory economics
- in finance: financial regulation
- in business, industry self-regulation occurs through self-regulatory organizations and trade associations which allow industries to set and enforce rules with less government involvement; and,
- in biology, gene regulation and metabolic regulation allow living organisms to adapt to their environment and maintain homeostasis;
- in psychology, self-regulation theory is the study of how individuals regulate their thoughts and behaviors to reach goals.
Industry self-regulation in the context of Corporate social responsibility
Corporate social responsibility (CSR) refers to companies conducting their core operations in a responsible and sustainable way to create a positive corporate social impact. It is a form of international private business self-regulation which aims to contribute to societal and environmental goals by reducing harm, for instance by reducing a company's carbon footprint or increasing positive outcomes for all stakeholders. It is related to the company's commitment to be ethical in its production, employment, and investment practices.
While CSR often takes the form of a philanthropic, activist, or charitable nature by supporting volunteering through pro bono programs, community development, and by administering monetary grants to non-profit organizations for the public benefit, corporations have been seen shifting to a holistic and strategic approach. Strategic CSR is a long-term approach to creating a net positive social impact based on brand alignment, stakeholder integration and ethical behaviour. Moreover, some scholars and firms are using the term "creating shared value", an extension of CSR which allows for social obligations to be met while the company reaps a profit.
Industry self-regulation in the context of Self-regulating
Self-regulation may refer to:
- Emotional self-regulation
- Self-control, in sociology/psychology
- Self-regulated learning, in educational psychology
- Self-regulation theory (SRT), a system of conscious personal management
- Industry self-regulation, the process of monitoring one's own adherence to industry standards
- Self-regulatory organization, in business and finance
- Homeostasis, a state of steady internal conditions maintained by living things
- Emergence, the phenomenon in which unpredictable outcomes emerge from complex systems
- Self-regulating variable resistance cables used for trace heating
- Spontaneous order