A paper presented by our Principal Consultant Mannie Sher, at Centre for Parliamentary Studies’ International Regulatory Affairs Symposium.
Abstract
Understanding human psychology and group and organisational dynamics are important aspects of the professional skills of effective regulators, but they are too often overlooked. Similarly, understanding what motivates the politicians who are responsible for establishing the legal frameworks within which regulators operate, can inform regulators on national decision-making processes. The impact of headlines, politics and tactics on policy-making can often be detrimental to the resulting statutory frameworks.
Mannie’s talk describes the expectations and disappointments of the Walker Review of Corporate Governance in UK Banks and Other Financial Industry Entities (2009), and he describes an experiment that examines the behavioural dynamics of three inter-dependent groups – politicians, the regulators and the regulated.
Mannie demonstrates how the financial crisis of 2008 exposed a serious tension between our desire for pleasure and profiting while avoiding real work and our mixed feelings about having to live in the real world. Each position is in tension with the other. Our cultural task is to integrate both pleasure and reality so that we can be creative in a context of legitimate authority. But excessive attachment to pleasure during the past 15-20 years of economic boom has left legitimate authority to regulators to arrange. This in turn has produced a lifeless conformity and denuded our organizations of vitality. Mannie argues that we need to develop a new basis to fully understand the implications of these developments and to create organizational and social systems that allow the imagination to flourish.