How are regulators structured?
While regulators can look remarkably similar, their operational and governance structures vary widely depending on their size, culture, and legislation. We take a deep dive into how regulators are structured in terms of their day-to-day operations and governance.

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From the outside looking in, regulators, particularly professional self-regulatory bodies, can look remarkably the same. They all have enabling legislation that instructs them to govern in the public interest and regulate professions in a manner that protects the public. They are governed by a Board or Council that will meet at various times throughout the year to make an array of decisions, while the day-to-day operations are delegated to staff, who are assigned to deal with each of the regulator’s core functions, or sometimes entire departments – including licensing, continuing education, and complaints. There are also ancillary departments like finance, operations, and human resources.  

However, while regulators exhibit several structural similarities, a closer look reveals nuances and differences in both their operational and governance structures that depend on the individual regulator’s size, activities, culture, and legislative requirements.  

Operational structure varies depending on size, activities, and strategic direction of regulator 

Operational structure refers to the various departments that carry out the regulator’s day-to-day activities. The operational structure of regulators can vary greatly from regulator to regulator and often corresponds to the size of the profession, which in turn, often increases staff size simply because the volume of applications, renewals, and complaints is larger. The larger a regulator’s staff is, the greater the variances in operational structure and large regulators will often undertake restructuring activities looking for ways to increase efficiency in their processes.  

Operational structures can also vary based on the extent of the activities the regulator takes on, which may or may not be directly mandated by its legislation. For instance, certain regulators also have entire prosecution divisions and independent tribunals to adjudicate matters involving alleged professional misconduct. Another example is law societies in Canada, which by virtue that many lawyers operate trust accounts and have files that continue for years, will have departments based around trusteeships for those lawyers that may abandon their practice or die suddenly without a succession plan.  

Then there are other activities that a regulator may undertake that are not directly instructed by legislation. For instance, some regulators develop and provide their own continuing education courses or institute an accreditation process for continuing education courses if they decide that licensees must have a certain number of accredited hours of study.  

The operational structure of regulators is often directed based on the strategy and decisions made by the regulator’s Board or Council. Boards are not charged with directing the operations of a regulator, but instead make high-level policy decisions. It is up to staff to decide how to operationalize the Board’s decisions, but certainly the Board’s decisions and its governance structure inform operations. For example, a Board may decide to change the requirements or focus of their continuing education program, since often the legislation is broad or general enough to allow Boards that flexibility. Staff will often be tasked with undertaking research and presenting different options for the Board to consider and may also recommend a certain approach based on the findings. The Board is responsible for making a decision on the approach and might direct some other high-level considerations, like the date for roll-out and an increase in the budget. However, staff will make the day-to-day decisions about any new positions to hire, how and what to communicate to the licensees, project plans etc. 

Governance structure varies according to scope, issues facing regulator

Governance structure refers to the governing Board or Council and committees that make the high-level decisions regarding the regulator’s main responsibilities and strategic direction. While all regulators will have a Board or Council, beyond that highest level structure, again there are many variances. Many regulators will also have a series of committees that deal with more focused decisions in certain areas. Some regulators have committees that are mandated by legislation, while others are created by a decision of the Board. These are referred to as statutory (the former) and non-statutory committees (the latter).

Many regulators, such as health regulators in many Canadian jurisdictions, must have committees to make decisions about complaints/investigations, and committees to make decisions about registration applications. Often Boards will create non-statutory committees based on both practical needs and strategic needs. Many Boards will create a finance committee that will assist with more of the details of financial planning and budgeting for the regulator.

At times, regulators will create ad-hoc and/or standing committees to deal with an emerging issue. For example, the Law Society of Ontario created the Equity and Indigenous Affairs committee and also a working group called the Human Rights Monitoring Group to pursue strategic initiatives around diversity and inclusion. The array, or lack thereof, of various other committees, working groups etc. is collectively referred to as the governance structure, which as we stated, in many ways, informs the operational structure. Where regulators, particularly larger ones, set up a more robust governance structure, the operations of the College need to support those various decision-making groups.

As regulators face increasing scrutiny, governance becomes a major topic of discussion

Examining a regulator’s governance structure will help glean what the regulator’s priorities are and how its operations are set up. Governance is no easy task, and even though Boards and committees do not run the day-to-day operations, they are ultimately accountable for the decisions a regulator makes. As regulators face scrutiny from the public, their licensees, and governments, governance is a major topic of discussion among regulators as they search for a structure that will be justifiable to their various stakeholders, but also for how they make decisions. This has led many regulators to implement reforms (where legislation allows) around governance issues such as board composition (shifting the balance of professional vs. public members), board competence and eligibility, and elections.

  

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Ariel Visconti
Written byAriel Visconti
Ariel Visconti researches and writes on government and politics, regulation, occupational licensing, and emerging technologies.

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