Topics
Product Liability
Adopted in 1985, the directive 85/374/EEC on liability for defective products aims to “ensure that producers take responsibility for defective products vis-à-vis consumers”.
Details – expert information
Ethical Business Practice & Regulation
The Essence of Ethical Business Practice
EBP seeks to create an environment where employees can:
- Do the right thing, based on the ethical values promoted by their company;
- Recognize ethical dilemmas and be trained to resolve them;
- Be open and honest, to speak up and learn from mistakes.
For organisations, this ethical culture serves to increase trust amongst their employees, regulators and other counterparts. It constitutes the necessary basis to engage with regulators and public authorities.
The Essence of Ethical Business Regulation (EBR)
Ethical Business Practice works side by side with Ethical Business Regulation. EBR can be regarded as a relationship between a business and a regulator, in which the business produces evidence of its on-going commitment to EBP and the regulator recognises and encourages that commitment.2
One of the objectives of EBR is thus to enable both business and regulators to benefit from a relationship based on mutual trust: in an ethical business culture, the objectives of internal compliance and external regulation converge.
EBR relationship involves regulators and business as trusted sparring partners, understanding the others' position and priorities. This implies having a culture of information sharing.
EBR encompasses the design and implementation of a regulatory system based on the following principles:
- Business commitment to fair and ethical behaviour;
- An open and learning culture, not seeking to blame;
- A collaborative culture;
- Proportionate responses in case of law infringements.
[2] C. Hodges & R Steinholtz, ‘Ethical Business Practice and Regulation: A Behavioural and Values-Based Approach to Compliance and Enforcement’, Hart 2017, p. 149-155)
Advantages of EBR
For governments:
- Promoting a business-friendly environment by reducing burden on them;
- Saving public resources by encouraging greater self and co-regulation;
- Achieving shared outcomes, growth and innovation;
- Reducing compliance and enforcement legislations.
For business:
- Better performance in terms of compliance and risk reduction;
- Improving relationships with regulators and enforcers by pursuing desired and common objectives, rather than adversarial outcomes.
Current research
Ethical Business Practice and Regulation: A Behavioural and Values-Based Approach to Compliance and Enforcement, Prof. Christopher Hodges & Ruth Steinholtz
Abstract - This book explains the concepts of Ethical Business Practice (EBP) and Ethical Business Regulation (EBR), a new paradigm in compliance and enforcement based on behavioural science and ethics. EBR provides the basis for an effective relationship between a business and its regulators, resulting in better outcomes for both. EBR is attracting extensive attention from regulators and businesses around the world. The UK Government's 2017 Regulatory Futures Review draws on EBR as the foundation for its policy of 'regulatory self-assurance'. EBR draws on findings from behavioural science, responsive regulation, safety and business and integrity management to create a practical and holistic approach. Examples include the open culture that is essential for civil aviation safety, the Primary Authority agreements between regulators and national businesses, and feedback mechanisms provided by market vigilance systems and sectoral consumer ombudsmen. This book provides an essential blueprint for sustainable business and effective future regulation.Ethical Business Regulation: Understanding the Evidence, Prof. Christopher Hodges
Abstract - In November 2015, the UK Better Regulation Delivery Office (BRDO) commissioned Professor Christopher Hodges to produce a brief introduction to the key concepts explored in his recently published book, ‘Law and Corporate Behaviour: Integrating Theories of Regulation, Enforcement, Compliance and Ethics’, which examines the theories and practice of how to control corporate behaviour through regulatory techniques, drawing on the principal theories of deterrence, economic rational acting, responsive regulation, and the findings of behavioural psychology. The aim of this paper is to provide regulators and others with an interest in developments in regulatory delivery with an overview of the research theories and empirical evidence noted in the book, and of the author’s proposition of a new theory of ‘ethical regulation’.Ethical Business Regulation: Understanding the Evidence, Prof. Christopher Hodges
Ethical Business Regulation Growing Empirical Evidence, Prof. Christopher Hodges
Abstract - This policy brief outlines the concept of Ethical Business Regulation (EBR), and records some current examples and empirical evidence of where it is applied. The concept is based on existing evidence on why people observe or break rules, on how culture can support continuous performance and innovation, and commercial success. The objective is to build on this evidence to enhance business performance in compliance with the values of society, and hence to boost economic growth.Ethical Business Regulation Growing Empirical Evidence, Prof. Christopher Hodges