Ofcom’s Lord Currie joins Royal Mail

I’m in the USA for another week, so I am not closely following Ofcom-related events this week, but I did catch this Telegraph article about Lord David Currie joining Royal Mail.  The most relevant nugget:

Lord Currie, Ofcom’s chairman, has joined the board of the postal organisation on a salary of £30,000 a year.

The peer took the role even though he does not stand down as chairman of the communications watchdog until mid-March. He has been at Ofcom since 2002.

Ofcom is expected to replace Postcomm as Royal Mail’s regulator later this year, following a Government review of the postal service last month. No firm date has been set yet for the change over, however.

Campaigners said the appointment raised fresh questions over whether Ofcom should now regulate Royal Mail.

I know I promised never to blog about postal services, but this issue is more about regulation in general…

There are typically problems when people move from public regulation to similar positions in the private sector.  They raise the appearance of impropriety because of the opportunities for personal gain and advancement.  In theory these opportunities could cause regulatory officials to base their decisions on factors — such as future employment — other than the public interest.  This is obviously not the case with Lord Currie.  His record of achievement at Ofcom would yield numerous private sector employment offers; a Royal Mail appointment clearly continues his record of public service.  Still, Ofcom should create a code of conduct for its employees — including board members — that flatly prohibits them from dealing with regulated firms in this manner.

Of course, a related problem has nothing to do with improper personal gain:  The regulated firm that hires someone fresh out of public regulation also gains that person’s inside knowledge, which may include non-public information about their competitors.

This problem surfaces periodically.  In 2008 Ofcom allowed one of its other (more junior) officials to join a regulated firm at the exact same time that firm was seeking exclusive financial benefits in the regulatory process.  The same problem of the appearance of impropriety existed in that case.  Even raising the issue makes me uncomfortable.  I’m sure these Ofcom officials are ethical people and generally public-spirited.  But what about the overall process?  Should it rely on peoples’ personal sense of ethics?  Of course not.  Surely it makes other regulated firms uncomfortable when they see former regulatory officials joining their competitors.  It makes it even worse when the policy issue of the day is whether or how to regulate (or subsidise) the firm that made the offer of employment.

UK regulation is steadily marching down the road of enforced proceduralism and judicial review.  That much is clear.  The only way forward is for regulators such as Ofcom to adhere to government-wide codes of conduct that prohibit ex parte contacts on matters of pending policy, offers of employment outside certain narrowly defined contexts, etc.