I have talked about how United Airlines has been an early example of the power of social media. I have spoken about how the board of United stepped in and changed policies. Now the House Transportation and Infrastructure Committee in the United States is making noises about airlines cleaning up their acts.
This is a clear example of how a governance structure works, stakeholders complain to management and management gets bossed around by the board and boards can get bossed around by the government. How many government departments will be interested in the operations of a business is a bit of a lottery. But every business and non-profit should be aware that governments are generally at the top of anyone’s governance framework.
The airline industry was deregulated in 1978, but there is always the chance that the industry could be re-regulated. A threat that should be taken seriously. Pendulums do swing back and forth and a self-regulating organization or profession should be aware that self-regulation is not a guarantee.
Any group is only allowed to self-regulate if they do not attract too much negative attention.