Undoubtedly, the Security Industry Authority’s (SIA) organisation and methodology to date leaves much to be desired but, since the Regulator’s foundation, Stakeholders and interested observers can only welcome the improved levels of protection offered by the assurance of individual probity – and, to an extent, improved skills levels across the guarding sector.
However, the promise of industry transformation was always exactly that – a promise. In the event, the result is at best a somewhat messy compromise based on minimum standards.
Regulation that offers competitive advantage
For my own part, I’ve always been rather sceptical of any regulation that offers competitive advantage, firmly believing that it’s not Government’s role to influence markets. In the Hampton Review of regulatory inspection and enforcement, published in March 2005, the author really hits the nail on the head in his covering letter to the Chancellor.
“The world in which Regulators operate continues to change, both with the pressure on business of a more competitive world, and the changing regulations that need to be enforced. As a society, we have increased expectations that regulation can and will protect consumers, businesses, workers and the environment, coupled with an increasing need to keep our businesses efficient and flexible such that they might face new competitive challenges. Our regulatory system has the pivotal role in resolving the regular conflict between prosperity and protection.”
This is surely an opinion few can take issue with, but arguably there’s a problem with Hampton’s final sentence. It’s this conflict between prosperity and protection wherein the SIA’s dilemma lies. The sentiment is commendable, but achieving the outcome seems problematic.
After the horse has bolted
Recent comments by the heads of the Financial Services Authority in a report by the BBC’s credit crunch guru Robert Peston on the current banking crisis go far towards illustrating the problem. Based on Greenspan’s free market philosophy, they anticipated ‘rational behaviour’ by the banks and, thus, had concentrated on structure, system and processes while consideration of risky strategy went largely unquestioned.
Now, after the horse has bolted, things may change but, frankly, what might they do (or have done) differently? I simply cannot imagine a situation whereby a Regulator might interfere with a competitive company’s right to determine its own course of action. If it did, what then? Could it be expected to indemnify shareholders if, as a result of such tinkering, a company then failed?
Similarly, how might the Regulator rank – and, perforce, recommend – its accredited companies?
Accepting liability for shortcomings
Constant Security Services’ managing director Mick Lee’s recent experiences (see the dedicated link on the right hand panel of this page) reveals the SIA’s problem. Mick describes an ACS company discovered to be failing and, possibly, in breach of the law. I find it difficult to see the Regulator or its masters accepting liability for a company’s shortcomings, particularly if it were a ‘Gold standard’ member of the ACS.
At this point, mea culpa, I must admit that at the time industry regulation was implemented, I was one of those who began to seriously question the future role of the BSIA. Frankly, I could neither justify nor admit to what I perceived to be a duality of outcome.
Require (and supervise) minimum standards
In hindsight, I was wrong. Competitive tensions are the nature of the beast, and it’s industry associations who are ideally placed to influence buyer behaviour – leaving the Regulator free to require and supervise what can only ever be minimum standards.
I see no reason why the Regulator might not provide a factual commentary – much like a benchmark or CV – regarding an ACS member’s characteristics, attainments and memberships without going so far as to be seen to recommend it. Competitor companies would then remain free to achieve such advantage as they see fit, completely free of the ‘dead hand of officialdom’.