Meta-Regulation

Amid a never-ending tirade of debates following the financial de-regulation of the 1970s, a school of thought developed; with Ayers and Braithwaite (1992) proposing an approach of responsive regulation formed on an underlying theme of ‘restorative justice’. On this basis, extensive studies have been undertaken as theorists have differed in their view on what level of regulation and type of enforcement action would be best suited to the current regulatory environment (Baldwin and Black, 2008). This introduces the notion of a ‘non-judicial’ legal system; identified by Christine Parker as ‘Meta-regulation’. Parker (2002) debated in The Open Corporation that a focus should be placed on how firms should be held accountable to the standards of their self-regulatory performance; as opposed to whether they should be held accountable – which had earlier been the case for deliberation (Sylva, 2003). The purpose of this essay is to examine the view of whether meta-regulation is, in practice, a plausible aspiration to achieving ‘corporate economic, social and environmental responsibility’ (Parker, 2006).

While the use of self-regulation as a method or voluntary feature of the regulatory regime has been widely said to have encouraged the practice of transparency, disclosure and provided a larger level of accountability to the general public (Carson, 2011); this particular form of regulation fell under severe scrutiny following the Global Financial Crisis (GFC). Issues pertinent to the operation, oversight and compliance of self-regulation have since posed a question of credibility, much of which has been subject to criticism as accountability and motives of different operating entities appeared to have been distorted during the crisis (Solomon, 2010).

Before the crisis, for financial institutions in particular; the proposition of a self-regulatory approach gained popularity as rapid advances - in both financial markets and the emergence of complex products and services -...