I confess that I am in two minds about the importance of self-regulation in the modern world.
On the one hand, it seems relatively unimportant compared with the scale and importance of the regulation created by Parliament and discussed extensively elsewhere on this website.
On the other hand, Michael Moran (in the British Regulatory State) says that:
'The self-regulatory system in Britain is vast. Only a tiny tip ... shows up in any systematic listing. The very summit of the tip consists of a small number of consumer-sensitive fields - like funeral services and used car sales ... Part of the rest of the visible tip can be seen in [the government's] list of 199 trade associations, most of which have some kind of code of conduct. ... [Then there] is the world of regulation represented by organized professionals ..., and beyond this the worlds of quasi and and aspirant professionalism, of codes administered by charities and learned societies, of sport and leisure associations, and of cultural organizations ... [one example being the] pastoral codes of conduct for Catholic priests developed in the wake of sexual abuse scandals in the Church.'
One form of self-regulation is Government-Sponsored Voluntary Regulation (GSVR) which has grown significantly in recent years and seems to have had an important economic impact on businesses. GSVR is often referred to as ‘pledges’ made between businesses and the government. Examples include reducing fat content or salt levels in food and reducing the use of plastic bags. Other policy areas where GSVR has been introduced include in relation to: the environment and sustainability; public health; employment and skills; pricing, trading policy and social policy. Some businesses’ reputations may be affected by media comments about their compliance or non-compliance with GSVR even though GSVR pledges are non-legal rules.
As an aside, there are numerous private sector regulators, especially of social and related media. Meta/Facebook, Twitter and many other companies in effect regulate the behaviour of those that use their services. And even companies such as Mastercard and Visa play an important role in policing (otherwise highly regulated) sectors such as gambling and pharmaceuticals, which are prone to fraud. The Financial Times carried an interesting article in June 2022 about this, focussing on payments companies' acceptance (or non-acceptance) of payments to porn sites. "Yet unlike most governments, there is no process of regulation. No consultation. Few public explanations. No names. No sense of who the arbiters of acceptable porn might be."
And then there are organisations such as the Frontier Model Forum set up in July 2023 by Anthropic, Google, Microsoft and OpenAI with the aim of "ensuring the safe and responsible development of frontier AI [large-scale machine learning] models". An additional aim was no doubt to head off the development of state regulation of this fast-developing and potentially worrying technology.
Is It Effective?
Self-regulation should ensure that regulatory design, implementation and enforcement is sensitive to the practical needs of those being regulated. It also cuts the cost to the taxpayer. Often, however, pure self-regulation does not work because 'cowboys' refuse to be bound by it, and there is then a tendency for the bad to drive out the good. (The Times reported in 2017 that 'Self-regulation lets bad bailiffs go on working'.) It is common, in these circumstances, for at least some in an industry to prefer the regulation to be undertaken by an arm of government.
(Indeed, good "trusted" and fully independent regulation can be essential if an industry or activity is to thrive. We would not have a nuclear industry if the Nuclear Inspectorate were not regarded as effective, so that industry and its regulator have developed a sort of symbiotic relationship. Much the same applies to the Human Fertilisation and Embryology Authority. Following that thought, it is interesting that the Better Regulation Task Force recommended, in January 2003, that there should be a dedicated nanotechnology regulator:- 'Government has a difficult job in ensuring that scientific research can flourish, whilst at the same time confirming to the public that research being carried out is both ethical and safe.')
If state-organised regulation does not seem appropriate then there is a half-way house in which apparent self-regulation (e.g. of accountants, lawyers and doctors, and of financial institutions) is in fact carried out by bodies created by statute, although such bodies are dominated by representatives of the industry which they regulate. Newspaper self-regulation is particularly controversial.
And there is an obvious danger that even this sort of self-regulation can turn into over-sympathetic and/or inefficient regulation overseen by friends and colleagues. The Solicitors Regulation Authority was for instance accused of taking eight years to ban rogue solicitor Maitland Hudson.
The British Board of Film Classification is an interesting self-regulator.