Outcome Based Self-Enforcing Co-Regulation: A De-Regulation Strategy to Reduce the Cost of Equity, Compliance and Regulation

Abstract

This paper describes how governments and regulators could introduce selective de-regulation based on exempting corporations from existing practices when they amend their constitution to provide superior outcomes for investors and other stakeholders. An example is presented on how a company achieved this objective to raise additional venture finance while also allowing the regulator to exempt it from the compliance processes and costs of changing auditors. The paper uses system science to argue that the introduction of self-enforcing co-regulation based on outcomes rather than practices would introduce competition for developing the most efficient and effective processes for both companies and regulators.

Keywords: Co-regulation, Corporate constitution, Corporate Governance, De-regulation, Network governance, Stakeholder forums, System science, Watchdog boards

JEL Classification: D74, G38, K22, L22, M49, M41