Self-regulation, to ensure that a business acts ethically, does not work because the current model of business places too much priority on the bottom line.
So long as the primary overriding singular goal of business is to make profit, self-regulation will fail. We see this failure again and again. Problems are ignored for as long as possible; sometimes people will have to actually die before any changes will occur.
The most recent example is the Fukushima nuclear plant disaster. Self-regulation meant dangerous oversights were simply self-ticked under the carpet, only to be suddenly and disastrously flushed out by the tsunami.
Three recent documentaries I saw gave further examples.
That is why we need a third party, the government regulators, with power over businesses, to act as the overseers for the public good.
Unfortunately, government can often be unhealthily involved with businesses.
In the second example above, the US government allegedly showed no interest in investigating Boeing’s actions when the alarm was raised by long-time Boeing employees. When the aviation regulator did investigate, Boeing’s lawyers ended up writing the investigating agency director’s speech!
In the third example, when the mining companies were granted the go-ahead, the government actually exempted them from accountability to the country’s water and air pollution regulations. Bizarre? Hardly when you realise the leaders in government are themselves senior executives / shareholders of mining companies!
And yet, we hear US presidential candidates loudly and proudly standing for even less regulation! Given the global financial crisis, isn’t this just insane?
The only real sustainable solution? Build a new generation of businesses. Ones that actually give a damn about what they do, and how they act, beyond simply making more money. Ones that acknowledge their own humanity, and their responsibility to humanity.
Fat chance? Given the general responses to the GFC, probably yes.