Introduction to Self-discipline and Peer Supervision of Credit Rating Industry - World Credit Organization
Introduction to self-discipline and peer supervision of the credit rating industry
1. In the beginning, each economic subject did not have civic awareness, and pursued the philosophy of "each sweeping the door". With the increase of interdependence among economic entities in the same industry, the untrustworthy and illegal behavior of the "black sheep" in the industry has brought more and more damage and crisis to the employees in the same industry, and people have begun to realize the importance of industry self-discipline and peer supervision. necessity. In the end, impartial people in the industry who are enthusiastic about public welfare affairs began to establish non-governmental organizations [NGOs], which made industry self-discipline and peer supervision regular and standardized.
2. Industrial self-discipline has two meanings:
1. Compared with the laws formed by public power, practitioners in an industry follow the principle of voluntariness to agree on certain standards and consciously abide by them. For example: The World Credit Organization [WCO] stipulates that members should follow the principles of independence, neutrality, objectivity and impartiality when practicing.
2. Practitioners in the industry voluntarily and consciously abide by some recognized or necessary standards. For example, in a snack street in a certain place, the practitioners did not stipulate in the articles of association and related documents not to buy sick and dead pork. However, practitioners all believe that "not buying sick and dead pork" is a standard that should be followed, and they have voluntarily complied with it for many years.
Third, peer supervision has two meanings:
1. Practitioners in the same industry supervise each other whether they comply with certain agreed standards.
2. Practitioners in the same industry monitor each other for compliance with certain recognized or necessary standards.
Fourth, the advantages of industry self-discipline and peer supervision
1. Self-discipline standards are formulated by the practitioners and practitioners in the industry themselves, and the willingness to voluntarily obey is very strong;
2. Self-regulatory standards are implemented by experienced people in the industry. Compared with government supervision, information asymmetry is less, and it is difficult for practitioners and practitioners who violate self-regulatory standards to use information asymmetry to avoid responsibility;
3. When people realize that the untrustworthy behavior of peers will directly or indirectly affect themselves, the enthusiasm for peer supervision in the industry is relatively high.
V. Significance of non-governmental organizations [NGO] implementing industry self-discipline and peer supervision
The experience of western developed countries tells us: Whether it is market failure or government failure, or both failures at the same time, the implementation of industry self-discipline and peer supervision by non-governmental organizations (NGOs) can effectively prevent or eliminate market failure and government failure, and ensure that the industry Internal fair competition and survival of the fittest promote the healthy development of the industry. (External note: What needs to be explained here is that some people equate "fair competition and survival of the fittest" with "law of the jungle of the jungle". Fair competition and survival of the fittest in human society are the natural law. Fair competition and survival of the fittest are not the law of the jungle of the jungle. Humans don’t have to worry about fair competition and survival of the fittest will evolve into the law of the jungle of the jungle. The reason is: the process of fair competition is a process in which competitors compare their abilities, and it is also a process in which competitors compare their morality. The result of fair competition is moral and Those who are talented win, those who have no virtue and no talent are out, and those who are virtuous but not talented will be funded. The winners will be donated to social welfare undertakings, and social welfare undertakings will help those who are virtuous and talented and those without virtue and talent to overcome their own weaknesses What human beings need to be vigilant about is: using various banners or subjectively for good purposes, objectively harming fair competition efforts or system design. Industries or fields without fair competition will inevitably evolve into unscrupulous and immoral The situation of vicious competition leads to the reverse elimination result that the virtuous will fail and the unvirtuous will win the survival of the fittest.)
Six, the characteristics of the World Credit Organization [WCO] member supervision
1. The whistleblower has the initiative and can win a lot of rewards.
Western countries attach great importance to the role of whistleblowers in surveillance. The concept of whistleblower was introduced by Professor Lang Xianping in Guangdong Satellite TV's "Financial Langyan" program, and the author was greatly inspired.
It is stipulated in the standard: Whistleblowers are those who discover violations and report to the World Credit Organization [WCO] and/or the media . A whistleblower can be a victim of the violation, an employee of the offending unit, a participant in the violation, or anyone unrelated to the violation.
The Executive Council of the World Credit Organization [WCO] does not have investigative powers for monopoly violations. Whistleblowers have the leading right to investigate violations. Whistleblowers can report and be investigated by the World Credit Organization [WCO] Executive Council. They also have the right to investigate on their own and directly sue in the International Court of Ethics.
The insider and the victim of dishonest behavior have the right to act as a whistleblower, report to the World Credit Organization [WCO] Executive Council or directly file a lawsuit to the International Court of Ethics. The World Credit Organization [WCO] heavily rewards whistleblowers with punitive damages borne by malicious dishonesty.
2. Every member has the right and obligation to assist in supervision.
Relevant standards stipulate that members have the right and obligation to truthfully report to the World Credit Organization [WCO] when they know that other members have violated the rules.
3. Each member has the obligation to cooperate with the World Credit Organization [WCO] in investigation, trial and arbitration.
Relevant standards stipulate that members have the obligation to cooperate actively in the investigation, trial and arbitration of the World Credit Organization [WCO].
4. Separate investigation and ruling.
In accordance with the principle of separation of powers, the president, executive council, and board of directors do not have the power to make decisions, but only to investigate. The adjudication power lies with the International Moral Court, and whether to punish and how to punish are ultimately decided by the International Moral Court, so as to guarantee the fairness of the punishment. The procedures of the International Moral Court are rigorous, scientific, and independent, so as to protect good people from being wronged.
5. Fine compensation and mental loss for malicious dishonesty.
If a member violates the rules maliciously, he/she needs to bear fine compensation and moral loss.
6. There is no specific penalty standard, so as to ensure that the intensity of punishment keeps pace with the times.
If the penalty standard is very specific, for example: how much is the fine for a certain violation. In this way, the perpetrator can pre-calculate the cost of violation, and when the cost of violation is lower than the income of violation, he still has the enthusiasm for violation. If the provisions are not specific, the accuser (or the victim) will propose the penalty standard based on the actual situation of the violation, and the International Moral Court will make a ruling based on the actual situation. This makes it impossible to calculate the cost of violations in advance, and ensures that the punishment is always greater than the income from violations.
"World Credit Organization [WCO] Member Supervision Standards" 1.4 The breach of contract mentioned in this standard refers to the violation of the ICE8000 international credit standard system standard Behaviors generally include: acts of dishonesty, violations of the bottom line of morality, violations of the bottom line of social responsibility, etc. In the standard context, it is appropriate to use breach of contract because the ICE8000 standard itself is a contract. However, for ease of expression in this book, "violation" is used instead of "breach".
The above content is excerpted from: "Building an Integrity Unit——Risk Control and Integrity Management"
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