Business at OECD (BIAC) Governance Committee Chairman Dr. Argüden’s statement on the Council Recommendation for Agile Regulatory Governance to Harness Innovation     (11 April 2022) 

• Good morning, as chair of the Business at OECD Governance and Regulatory Policy Committee, I would like to emphasize that it has been a great pleasure to work with Nick Malyshev in this journey of global learning for better regulation and governance for over a decade, since 2011.  

• While he will be retiring from his current post in June, we are very happy to have him continue to serve on the Advisory Board of Argüden Governance Academy to benefit from his intellectual leadership. 

• One of his seminal contributions has been the Regulatory Policy Outlook.  We are looking forward to Nick joining us, at launch the Turkish version of the 2021 Report with Tüsiad on April 18^th, next week.

• As the Business at OECD (BIAC) Governance and Regulatory Policy Committee, we strongly support the implementation of the OECD Council recommendation on Agile Governance that was approved in October 2021.  

• I would like to note that there is still a significant room for improvement in implementing the 2012 recommendations.  ‘What percentage of investment decisions by the private sector are made without a feasibility study?’ and ‘What percentage of regulations are enacted without an ex-ante impact analysis?’ The difference gives us an idea about the room for improvement.  

• We believe that the private sector is the main driver of innovation and technological change since being at the forefront of innovation enhances the competitive advantage of a business in times of increasing competition. 

• Hence, we very much support the OECD’s Agile Governance Recommendation since it recognizes that innovation fosters economic growth and that it must not be constrained by an unfavorable regulatory framework.

• Furthermore, Agile Governance also enables greater experimentation, testing, and trialing to stimulate innovation under regulatory supervision. Promoting cross-sector and multi-jurisdiction experimentation initiatives to provide businesses with an environment in which to trial cross-cutting innovations, enhance regulatory cooperation and promote interoperable regulatory frameworks.

• For trust in governance, we need to have informed and inclusive stakeholder engagement which requires sharing of the results of ex-ante impact analysis in a way that all stakeholders understand. 

• Moreover, Agile governance also emphasizes the need to engage with stakeholders to create more comprehensive public policies. Hence, we believe that it is essential that, as key stakeholders, business should be consulted on a systematic basis. 

• Finally, at Business at OECD we are proud supporters of the symposium on Agile Governance that will take place in end-April in Washington, DC where Business at OECD is a co-organizer with the OECD and George Washington University. We see it as an example of the fruitful dialogues we wanted to create around the Agile Governance recommendation.   I also wanted to use this opportunity to invite every to participate either in-person or online on the 26^th of April.

Business at  OECD (BIAC) Chairman Dr. Argüden’s statement on the Draft Recommendation on International Regulatory Co-operation to Tackle Global Challenges (12 April 2022)

• Good morning, as chair of the Governance and Regulatory Policy Committee of Business at OECD (BIAC), I want to publicly express our support for the Draft Recommendation on International Regulatory Co-operation to Tackle Global Challenges.

• Today’s challenges are increasingly interconnected and international, both for the regulator and for companies on issues such as the ecological transition or digital innovations. Increased cooperation on an international scale would allow for more uniform regulatory frameworks.

• We already established our favorable position to International Regulatory Cooperation in our report ‘Regulatory Divergence: Cost, risks, impacts’ which was published by BIAC in 2018. There, we found that regulatory divergence is resulting in material and increasing costs even just in the financial sector globally, consuming on average between 5-10% of annual turnover.

• In the report, we also underlined that achieving more effective regulatory cooperation and harmonization should be a priority for policymakers.

• We identified in our recommendation the “Enhanced international regulatory cooperation” as one of the key steps to curb regulatory divergence.

• Finally, the current context of recovering from the COVID crisis, shows how important it is to be aware of cross-border issues that can affect supply chains.
• Hence, facilitating the interoperability of services and cross-border activities, reducing costs and delays to international trade and investment for essential goods and services is one of the key advantages that greater international regulatory cooperation achieves.

Business at OECD (BIAC) Governance Committee Chairman Dr. Argüden’s contribution to the Agile Governance Workshop in Washington DC (27 April 2022)

• The business world supports the OECD’s Agile Governance Recommendation since it recognizes that innovation fosters economic growth and that it must not be constrained by an unfavorable regulatory framework.

• Agile Governance also enables greater experimentation, testing, and trialing to stimulate innovation under regulatory supervision. Promoting cross-sector and multi-jurisdiction experimentation initiatives to provide businesses with an environment in which to trial cross-cutting innovations, enhance regulatory cooperation and promote interoperable regulatory frameworks.

• However, as it is evident by the OECD’s Regulatory Policy Outlook 2021, many countries are not even fully implementing the basics of good governance such as ex-ante impact analysis for better policy design, informed and inclusive stakeholder engagement for understanding the citizen priorities and developing innovative solutions, and ex-post evaluations for continuous improvement.

• Therefore, in moving to agile governance methods, the public sector needs to consider costs and capacity for compliance and enforcement.  Particularly, agile regulation needs to consider:

• • How to develop public sector capacity on technical and financial knowledge 
  • How to develop sufficient deterrence to ensure compliance
  • How to utilize behavioral economics to leverage moral values, dominant social and cultural norms
  • Legitimacy of the authorities and perceived fairness
  • How to increase the quality of engagement/participation that includes upfront communication and ex-post feedback to all participants
  • Independent regulatory oversight capacity
• Also goal oriented regulatory guidance that focuses on outcomes rather than the process may be an effective tool to bring about an environment to promote innovations.