Securing regulatory compliance

Many agencies are not aggressive in educating regulated companies and their employees about the requirements which regulations impose on industrial activities. They seem content to issue their regulations and passively wait for the word to trickle down to the people who do the acts affected by the requirements.

The regulator should distribute his regulations, without cost, to all companies (and individuals, when the requirement applies directly to an individual who is not an employee of a regulated company) subject to his regulatory control. The regulator should require regulated companies to establish training programs which will ensure that each employee performing a regulated function knows what the regulations require of him and how to do his job so as to meet those requirements. The regulator should develop means of publicizing his regulations, so that everyone subject to his regulations will know the regulatory requirements.

As soon as he issues a regulation, setting a legal standard of conduct, the regulator turns his attention to getting compliance with regulation. Issuance of a regulation does not raise the level of performance by those subject to the regulation. It only sets a legal requirement which, if complied with, would raise the level of performance. It is compliance with the regulation – performance according to the standard – which produces the desired result.

The agency cannot depend on spontaneous compliance. Education is the bridge between issuance and compliance. The agency has to develop an educational program which will ensure that those who perform regulated functions know what the regulations require of them. The first step is to distribute all regulations free of charge to all companies (and individuals, where appropriate) subject to the regulation, so that there is no doubt about their being advised as to the existence of the regulation. The second step is to require each regulated company to have a training program which will educate each employee, performing a regulated function, as to the requirements of the regulations which he is subject, and how to do his job to meet the requirements. The individual employee must know how to comply with the regulations, because he performs the function.

Of the many products of his office, regulations are the regulator’s most important product. He should merchandise this product with a vigor equal to its importance, consciously using merchandising techniques in presenting each regulatory requirement to those affected by it. The agency should cultivated the trade press, trade association and labor union publications, and scientific and technical society journals, as means of getting the message to the people who need to know. The agency should also seek out opportunities to do missionary work at trade association and labor union conventions and at the one-week and two-week courses which universities offer to middle management.

Our social structure is built on voluntary compliance with the law, but compliance presupposes knowledge of the law. While everyone is presumed to know the law, the regulator cannot rely on this presumption in the administration of his program. Thousands of people in hundreds of companies are probably involved in the industrial operations affected by a new regulation. It is vacuous to think that they will somehow intuitively know of a new regulation when it is published in the Federal Register. The regulator’s issuance of a regulation has no practical effect until the individual people who perform the affected industrial operations know what the regulation requires them to do.