This presentation by Nick Malyshev from the OECD Regulatory Policy Division was made during a roundtable discussion on Changes in Institutional Design of Competition Authorities held at the 122nd meeting of the OECD Competition Committee on 18 December 2014. Find out more at http://www.oecd.org/daf/competition/changes-in-competition-institutional-design.htm

1. BEST PRACTICE PRINCIPLES FOR
THE GOVERNANCE OF
REGULATORS
Presentation by Nick Malyshev
Head, Regulatory Policy Division
OECD Public Governance and Territorial Development Directorate
Competition Committee Roundtable on
Changes in Institutional Design
Paris, 18 December 2014

2. The Network of Economic Regulators
OECD
NER
More than
70
regulators
across
sectors
OECD
members
and non-
members
Regular
sharing of
lessons and
experience
Analysis,
principles
and
guidance

3. The 2014 OECD Best Practice Principles
for the Governance of Regulators
- Role clarity
- Preventing undue influence
and maintaining trust
- Decision-making and
governing structure
- Accountability and
transparency
- Engagement
- Funding
- Performance evaluation

4. When is independence more appropriate?
• Need for the regulator to be seen as independent,
in order to maintain public confidence in the
objectivity and impartiality of decisions
• Need for competitive neutrality (government and
non-government entities are regulated under the
same framework)
• Need to protect the impartiality of decisions that
can have significant impact on particular interests
• Safeguarding organisational, financial and
decision making autonomy

5. What does independence mean in
practice? – Taking instructions
41.2%
11.8%
5.9%
41.2%
17.6%
5.9%
11.8%
58.8%
35.3%
11.8%
5.9%
35.3%
17.6%
14.7%
5.9%
61.8%
38.2%
20.6%
23.5%
44.1%
26.5%
17.6%
14.7%
47.1%
76.5%
88.2%
82.4%
41.2%
67.6%
79.4%
73.5%
29.4%
52.9%
73.5%
79.4%
44.1%
61.8%
64.7%
73.5%
17.6%
41.2%
58.8%
55.9%
5.9%
23.5%
32.4%
35.3%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%
Long-term strategy
Work programme
Individual cases or decisions
Appeals
Long-term strategy
Work programme
Individual cases or decisions
Appeals
Long-term strategy
Work programme
Individual cases or decisions
Appeals
Long-term strategy
Work programme
Individual cases or decisions
Appeals
Long-term strategy
Work programme
Individual cases or decisions
Appeals
Long-term strategy
Work programme
Individual cases or decisions
Appeals
ElectricityGasTelecomRailAirtransportPorts
Percentage of jurisdictions
yes
no

6. What does independence mean in
practice? – Head/Boards
26.7% 73.3%
0% 20% 40% 60% 80% 100%
Are there restrictions with regard to the
employment history of the agency
head/board members (e.g. minimum time
away from the industry that the regulator
regulates)?
In percent
yes no
6.7% 93.3%
0% 20% 40% 60% 80% 100%
May the agency head/board members hold
other offices or appointments in the
government or the industry that the regulator
regulates?
In percent
yes (with the consent of the
agency head)
no
37.0% 29.6% 25.9% 7.4%
0% 20% 40% 60% 80% 100%
Can the agency head/board members take
jobs in the government and/or the sector
that is regulated by the regulator after their
term of office?
In percent
yes (without any restrictions)
yes (after a certain amount of time
and/or with the consent of the
agency head)
yes (after a certain amount of time
and/or with the consent of the
agency board)
no

7. Accountability and independence closely
linked – accountable to whom?

8. Going beyond formal independence
• So far, mostly focused on formal/de jure
independence
• But what about practical implications and the
practice of independence?
– For example, weak independence can mix policy
and regulatory functions and undermine
effectiveness and trust (forthcoming NER review
of Colombia’s communications regulator)
– More in-depth work on independence of
regulators to be discussed by the NER in April
and November 2015 meetings