20 Oct Alberta Energy Regulator receives a Framework for Regulatory Excellence
As mentioned in previous blog posts, we have been participating in the Alberta Energy Regulator (AER)’s Best-in-Class Initiative. This initiative is being conducted by the University of Pennsylvania through its Penn Program on Regulation to develop the tools and framework necessary for the AER to become a best-in-class regulator.
On September 21, the AER received an executive summary of the report arising from this initiative entitled Listening, Learning, and Leading: A Framework for Regulatory Excellence. The report sets out and addresses four questions which form the basis of a regulatory framework (page ii):
- What are the attributes of regulatory excellence?
- To what do these attributes apply?
- How can a regulator become or remain excellent?
- How can a regulator measure its progress toward or its attainment of excellence?
What are the attributes of regulatory excellence?
The report identifies three core attributes of regulatory excellence: utmost integrity, empathic engagement and stellar competence. For each of these core attributes, there are several underlying tenets. In order to achieve and maintain utmost integrity, a regulator must display fidelity to the law, respect for democracy, and commitment to the public interest. Empathic engagement requires a regulator to be even-handed, and to listen and respond (which includes transparent decision-making). Finally, a regulator demonstrates stellar competence with its analytical capacity, instrumental capacity, and high performance.
To what do these attributes apply?
The report concludes that an excellent regulator must exhibit utmost integrity, empathic engagement and stellar competence in its traits as an organization, in its actions, and in the outcomes of its actions.
How can a regulator become or remain excellent?
The report provides a general model for a regulator seeking excellence. The key facets of operations – internal management, external engagement, priority setting and decision-making, and problem solving – must operate in alignment with the core attributes of utmost integrity, empathic engagement and stellar competence.
In the report, this is visually illustrated as a causal chain (page v). As well, the report provides a checklist of issues to be considered when aligning the key facets of operation with the core attributes of regulatory excellence (page xi to xii).
How can a regulator measure its progress toward or its attainment of excellence?
In measuring its progress toward the attainment of excellence, the regulator must “define the purposes of evaluation and performance measurement clearly and then build learning systems to meet those purposes” (page ix). In other words, a regulator must be strategic in its approach by determining the broad attributes of excellence it aims to improve and defining the specific attributes, indicators, data sources and methodologies for measurement.
The report concludes that, in order to move toward regulatory excellence, four steps are required. These are self-awareness, scoping (i.e. identification of where focus should be), strategic action, and evaluation and continuous improvement. Ultimately, the report makes several strategic recommendations for any regulator seeking excellence (pages viii to ix):
- Align strategic priorities around all three core attributes of regulatory excellence.
- Align organizational culture with the three core attributes of regulatory excellence.
- Build human capital that maintains stellar technical competence as well as ensures empathic engagement and continued commitment to professional and public integrity.
- Involve the public in operationalizing regulatory excellence and in identifying management priorities.
- Take a strategic approach to performance measurement and evaluation.
At this stage, only the executive summary of the report is available. The final report – which will include the complete framework for regulatory excellence – will be released at a later date. As well, additional consultation with stakeholders is planned for later this fall. Once the final report is released, there needs to be consideration of how the framework will specifically apply in Alberta. For example, how will the framework be used by the AER to address issues of transparency and contribution to a public dialogue?
If you are interested in this initiative, more information (including a number of related research papers) can be found at The Penn Program on Regulation website. The AER also maintains a web page dedicated to this initiative at http://www.aer.ca/about-aer/spotlight-on/best-in-class-project.