Self-policing organisations are responsible for their own compliance to legal, safety and ethical standards – they differ from organisations that have outside entities, often specialists, checking and reporting on their compliance. Self-policing organisations may handle all compliance activities internally or may set up additional bodies which have varying levels of independence from the parent organisation.
Self-policing has advantages to the organisation, who can more tightly control their own failures than if a separate entity was responsible. The public budget also benefits as there are no costs associated in setting up a regulatory body because the cost of compliance is borne by the company itself.
Disadvantages of self-policing organisations include an inherent conflict of interest whereby the organisation is being asked to report on its own failings, which can cause negative PR and reputational damage. In sensitive organisations or those that can have broad effects on others and the environment, this is a bigger disadvantage e.g. oil companies that have to self-police their compliance with crisis response procedures. A disadvantage to the organisation is that failure to report a compliance issue may be seen after the fact as an attempt at a cover-up, even if it was a genuine mistake.