The Committee on Standards in Public Life has called for staff at UK regulatory bodies to be subject to the same standards on taking up new appointments as civil servants and senior politicians.
A new report looking at more than 70 regulatory bodies – including organisations such as the Financial Conduct authority and Ofcom – found that fewer than one-third had policies in place to manage staff moving to companies they had previously regulated.
The report, Striking the Balance: Upholding the Seven Principles of Public Life in Regulation, said so-called “revolving door” appointments could bring vital expertise and were not inherently problematic, but also carried risks.
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While the career moves of senior executives and board members often attract high-profile attention, the report said operational staff at lower levels of an organisation “may have more detailed knowledge about competitors’ confidential information or regulatory intentions than those at the top”.
It said: “If not properly managed with adequate safeguards, the revolving door can be a serious threat to the regulator’s essential integrity and independence.”
The report called for departing board members and senior executives to be subjected to the same vetting processes as those which apply to senior civil servants and ministers under the oversight of the Advisory Committee on Business Appointments.
ACOBA reviews individuals’ proposed appointments and issues a decision on whether candidates can take up the role without betraying inside knowledge they have acquired in government or Whitehall.
The Standards Committee said applying its principles would “ensure that such moves are conducted with integrity, and to promote trust in the regulatory body, regulators should be entirely transparent about post employment destinations and restrictions”.
It also called for the consideration of additional safeguards on future contact between former staff and the regulator, and new rules to prevent staff leaving a regulatory body from disclosing confidential information.
Committee chair Lord Paul Bew Said the report, which also looked at governance and transparency, had not been triggered by any particular event, but instead should be seen as a “health-check” on the way in which regulators managed ethical concerns.
“Regulation is all about striking a balance: between compliance and capture, between transparency and necessary confidentiality, and between independence – from both government and those they regulate – and healthy engagement,” he said.
“There is also great diversity across regulatory bodies in terms of their size, status, role, function and responsibilities.
“While encouraged by the overall picture, we have seen instances where, on occasion, there is an imbalance that is out of step with the seven principles.”
The committee’s seven principles are: selflessness, integrity, objectivity accountability, openness, honesty, and leadership.