Institutionalizing fairness in financial markets: Mission impossible?

This article analyzes the institutionalization of process‐oriented regulation, namely: regulatory institutions that allow firms to adapt regulation to their individual circumstances, while holding them to account for the adequacy and efficacy of their internal compliance systems. The article's main focus is on the strategies sought by compliance professionals to attain managers' receptiveness to regulatory expectations. It analyzes British financial firms' responses to a process‐oriented regulatory initiative, which sought to transform the widespread culture of product “mis‐selling” in this industry. Three key arguments and hypotheses are put forward: first, it is suggested that the existing theoretical literature on process‐oriented regulation overly stresses managers' rational, profit‐maximizing motivations for (non‐)compliance, whilst overlooking their emotive motivations. Second, it is proposed that managers' emotive resistance is expected when regulatory expectations challenge firms' “organizational identities” and thereby their individual identities. Third, it is hypothesized that when process‐oriented regulation poses a threat to organizations' identities, its institutionalization will entail delegation of the design and subsequent implementation of compliance systems to managers outside compliance, and reframing of regulatory expectations into existing businesses discourses and methodologies.     

Asserting integrity in Mexico's civic sector

In societies where civic space is closing, integrity in the civic sector is critical for its sustainability. Where state regulatory frameworks are inadequate, or worse, manipulative, self-regulation can help defend the sector's integrity and strengthen the ability of civic associations to serve the public and contribute to democracy. This paper describes the strategic role in self-regulation of a particular type of third sector actor in Mexico, the coordinating body or civic network. A case study of the Mexican Center for Philanthropy (CEMEFI) and its Accreditation in Institutionalization and Transparency project illustrates the contribution of NGO networks in service to the sector, and their key role in diffusion of norms of transparency and accountability within the civic sector and beyond.