65. Make Friends With Your Regulators

SCRIPT: Listening back to the first episode of OMG, I think that I’ve generally followed through on my promise not to emphasize the “hard” side of corporate governance. There are lots of books, podcasts, and reports out there that’ll explain the nuts and bolts better than I can, and with more authority. One great source for that kind of insight is the regulator or regulators that govern your industry, sector, jurisdiction…or whatever. But in keeping with my promise to emphasize the “soft” side of corporate governance, I have a bit of advice about working with your regulators. In my experience, any regulator that issues guidance or mandates relating to governance is learning as they go just like the rest of us. They exist in the same ever-changing world that we do and don’t have the privilege of being on the front lines like many of the organizations they oversee. And I’ll be candid – sometimes I come across governance regulations that are behind the times, or ineffective, and even sometimes ambiguous nonsense. Working with a client in a regulated industry, we came across a rule that seemed to say that boards somehow did AND DIDN’T have authority over their CEOs. My client had noticed it years before and just lived with it. This leads me to the soft side of the issue. My advice to the client was “why don’t we call the regulator and talk to them? I’m sure it wasn’t their intention to be ambiguous.” So we DID call the regulator, and they were grateful for the call! In fact, everyone I know inside regulatory entities is always open to curious and insightful feedback about governance rules. Maybe they’d want to hear from you, too!