The Unusual Place of Industry Codes of Conduct in the Regulatory Framework

The comment of Commissioner Hayne in his Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry – that ‘industry codes … occupy an unusual place in the prescription of generally applicable norms of behaviour’ – was directed to voluntary industry codes. The term is nevertheless used indiscriminately, and industry codes inhabit each regulatory strategy – self-regulation, quasi-regulation, co-regulation and explicit government regulation. The term ‘industry code of conduct’ is not a term of art with a settled meaning and is widely used as a convenient term to describe a diverse range of industry rules –from aspirational ethical statements of industry associations with no effective coverage, content or enforcement, to legislated prescriptions in various forms which are imposed by, and attract, the full majesty of the law. This article examines the role, operation, and legal effect of industry codes under each of the regulatory strategies and proposes a more rigorous taxonomy.