Regulation, trust and the professions

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  • Published Date: 05 September 2020

By Roxane Marcelle-Shaw

What makes a profession trustworthy? In August 2020 the chair of ASIC, James Shipton, addressed a similar question about the financial system and corporations in an ANZSOG/National Regulators Community of Practice (NRCoP) webinar on Regulation, Trust and Social Licence. He identified the three key contributors to trustworthiness as:

  • competence –having the right skills and knowledge to do the job.
  • care –attention and consideration applied to doing something correctly and avoiding risk, harm or damage for the recipient.
  • ethics –doing the right thing, even when no one else is watching.

To put it another way, professions are trusted to care for us competently and to have the public interest at heart. As consumers of professional services, we are entitled to believe that professionals will reliably and ably act in our best interests.

Regulation

For professions to be effective, they must maintain the community’s trust. This is commonly achieved through peer accountability and regulation of the competence, conduct and culture of the profession in accordance with community expectations.

Historically, associations have been primary regulators of their professions through ‘self-regulation’. In recent times, however, and often in response to failures of competence, conduct and culture leading to consumer harms, governments have stepped in and ‘co-regulation’ has become prevalent. A recent ANZSOG/NRCoP webinar on this topic discusses how and why professions are regulated.

The critical question is: what steps can regulators of a profession - associations, employers, the state, or a combination thereof – take to earn and catalyse trust?

Consumer expectations

As policy and regulatory interest in the role of trust has grown, so too has our capacity to track the community’s level of trust in professions. As one among many such surveys, the 2019 Ipsos Global Trust in Professions showed that doctors are the most trusted profession (69%).

The National Registration and Accreditation Scheme demonstrates how health regulators have appreciated and incorporated community expectations. For example, by working with a Community Reference Group complemented by initiatives such as the report and action plan on improving the consumer complaints experience, Setting Things Right and a program of podcasts auspiced by AHPRA, the Australian Health Practitioner Regulation Agency.

Conduct and competence

In the regulation of competence and conduct, the Chartered Accountants Australia and New Zealand are guided by their report The Future of Trust findings, including that new technology combined with traditional values such as face-to-face contact and a purpose beyond profit can help improve trust. The report recognises that honesty and ethical behaviour are key to gaining trust in all relationships.

Ethical culture

A profession’s commitment to serve the public interest and deliver public goods is underpinned by an ethical culture resting on a shared set of professional values.

The 2019 Governance Institute of Australia’s Ethics Index demonstrated that accountability (61%) continues to be the top element of importance to ensure ethical conduct in society, with no change compared to 2018. This is followed by transparency (57%), whistle-blower protection (50%), and highly ethical leaders (49%). Not surprisingly given the evidence in the recent Banking, Superannuation and Financial Services Royal Commission, in 2019 the financial sector continued to have the lowest ethical rating, indicating very low trust consequent on perceived unethical behavioural standards.

In his final report, the Commissioner, the Hon Kenneth Hayne AC QC, called out regulators’ important role in assessing an entity’s culture - to “hold up a mirror” to it and supervise change. Commissioner Hayne’s six basic norms are of interest to all regulators as a means of safeguarding consumers and ensuring trust:

  • Obey the law
  • Do not mislead or deceive
  • Act fairly
  • Provide services that are fit for purpose
  • Deliver services with reasonable care and skill
  • When acting for another, act in the best interest of that other.

Further research and resources

The Professional Standards Councils’ research library on modern professionalism, produced through an ARC Linkage Project led by the UNSW Centre for Law, Markets and Regulation, provides more than 40 articles to promote and advance research on professional obligation and regulation in the 21st century. A particularly valuable contribution is The value of contemporary associations, where Dr Justine Rogers and Deborah Hartstein provide an evidence-driven response to the urgent and challenging question of how governments might best ensure the trustworthiness of the professions.

Roxane Marcelle-Shaw is an alumni of ANZSOG’s Executive Fellows Program and CEO at the Professional Standards Authority, the regulatory agency of the Professional Standards Councils, working to improve standards and protect consumers of professional services across Australia. Roxane is also a member of the Occupational Therapy Board of Australia. In this brief article she explores the relationship between professions, trust and regulation.