Self-regulation is the ability of an entity, association, organization or institution to regulate itself. Thus, it designs its own monitoring system on a voluntary basis.

That is, when an industry is self-regulated it means that there is no supervisory entity. Instead, it is the same companies that exercise control over their actions.

Self-regulation can take different forms such as industry codes of conduct, technical rules, professional practices manual, among others.

An example of self-regulation can be that of the press. This, when its contents are not monitored by the government, but by an entity made up of the same private companies .

Advantages of self-regulation

Among the advantages of self-regulation include:

  • Preventive work: Self-regulation allows to prevent, through education, code of conduct and others, that the company or organization falls into inappropriate or illegal behavior. It is an a priori response (before an event occurs) instead of an a posteriori reaction (after an infraction).
  • Greater commitment: Since there is a control that is born from the same organization, the people who make it up can have a higher level of commitment to compliance.
  • Better information: Companies can take advantage to detect the areas in which greater or lesser control is required. External regulators, on the other hand, have less information and usually make the rules according to the average (of the companies in the sector) or to general assumptions.
  • Greater flexibility: Allows the organization to adjust more quickly to changes in the environment.

 Disadvantages of self-regulation

However, self-regulation also has its drawbacks:

  • Lack of compliance: Because there is no external control, organizations can relax and stop fulfilling their obligations.
  • Lack of homogeneity: Since control is voluntary, not all companies face the same standards. This can lead to disadvantages over those that apply greater discipline because they are perhaps incurring higher costs.
  • Insufficiency:The rules and commitments adopted under self-regulation may not be sufficient to adequately fulfill the rights of consumers or other aspects that a regulator would seek to protect.


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