The Benefits of a Distinct Regulatory Capability Framework: Moving Beyond Organisational Capability Frameworks

Introduction

Regulators [[i]] face more demands than ever. They need to be transparent, risk-based, consistent, collaborative, skilled with digital tools, and make defensible decisions in complex situations. These expectations show up in daily work, case by case, and decision by decision.

Yet many regulatory agencies tend to try to develop capability using a generic Organisational Capability Framework (OCF), [[ii]] but importantly, these do not address issues key to the success of a regulatory (function) agency.

While an OCF sets expectations for workplace behaviours, values, and leadership, it doesn’t tell the full story. OCFs don’t address the craft of regulation itself — the specialised skills, judgement, and professional practice at the heart of regulatory work — or what it takes to be an effective regulator.

As a result, the OCF provides an incomplete picture of what good regulatory practice requires. This is where a Regulatory Capability Framework (RCF) [[iii]] can help.

This capability gap has real consequences, including:

• uncertainty about how much discretion there is and when to exercise it

• inconsistent approaches towards risks and harms

• uneven decision-making across regulatory teams and regulatory functions

• learning and development that feels disconnected from day-to-day regulatory work.

In short, an OCF can shape how people are expected to behave at work, but it does not equip them with the knowledge, skills, or judgement required for real-world regulatory practice. This is because an OCF’s purpose is strategic and development-focused e.g.  to align employee skills and behaviours with organisational goals and assist with certain HR compliance aspects (such as work health and safety, enterprise agreements, financial responsibilities, and codes of conduct) —rather than the day-to-day demands of regulatory decision-making.

This article argues that a dedicated Regulatory Capability Framework (RCF)—used alongside, or integrated within, an Organisational Capability Framework (OCF)—is essential to help close this gap. RCFs provide a clearer, more practical way to define, build, and sustain regulatory capability, because they focus on:

• equipping regulatory practitioners with what they need to do their jobs well

• giving agencies a strong foundation for consistent, confident, and effective regulatory practice.

Background

Regulatory work is complex, demanding, involves high stakes, and incorporates regulatory policy, regulatory operations and regulatory delivery/outcomes. It has real consequences for people, markets, and communities, regardless of sector, industry or commodity being regulated.

Regulatory decisions are rarely straightforward: regulators must weigh risk, potential harm, evidence, fairness, impact, and enforceability, often under tight timelines and public scrutiny, and with finite resources. Doing this well requires skill, judgment, and confidence at every level in and across a regulatory agency.

Success depends on capabilities specific to regulation, including, but not limited to:

• Analysis and risk assessment: Assessing and prioritising risk and potential harms. Understanding the impact that individual regulatory decisions, regulatory activities, and regulatory actions have on the entire regulatory system.

• Judgement and discretion: Exercising judgment and applying discretion in complex situations.

• Decision quality: Making legal, defensible, and evidence-based decisions.

• Regulatory action and response: Choosing appropriate regulatory, compliance, and enforcement responses.

For many agencies, regulatory capabilities are assumed rather than explicitly defined. OCFs focus on how people work within the organisation’s structure or operating model[[iv]] — rather than how they perform their regulatory roles and functions. This fundamental disconnect can lead to the creation of subcultures that in turn can result in suboptimal regulatory delivery at best, and regulatory failure at worst.

As a result, much regulatory craft is learned on the job, applied inconsistently, and understood without a shared language or framework for good regulatory practice. This makes it harder for agencies to ensure consistency, confidence, and effectiveness across regulatory teams.

People working in regulation understand the importance of good regulatory practice because they have seen the impact of:

• Regulatory decisions – Required but not made, made and overturned, based on inadequate information, ineffective, or unlawful.

• Inconsistent practices – Occurring across individuals, teams, and geographic locations.

• Development paths and careers – Misaligned with, or unsupportive of, regulatory roles and regulatory functions.

• Staff identity – Where individuals lack a clear sense of their regulatory role [[v]] and regulatory identity (especially if it conflicts with their core professional identity, e.g. as a scientist, technician, or project officer).

An RCF helps close this capability gap and improve regulatory maturity. It clarifies regulatory practice, provides a shared or more common language for skills and performance, and supports more focused recruitment, role induction, training, continuing professional development, and performance assurance and improvement.

When used alongside an OCF, an RCF gives regulatory practitioners, regulatory managers, regulatory executives, and regulatory boards a practical tool to build stronger, more confident, and more consistent regulatory performance.

What Makes Regulators Effective? The Role of Dedicated Regulatory Capability Frameworks

OCFs typically outline the behaviours, skills, and qualities needed to work effectively in any organisation. As a result, they are usually broad, flexible, and not tied to a specific sector, industry, or commodity. While many of these capabilities are relevant—and sometimes essential—for regulators, they do not cover everything: required for effective regulatory practice; to support regulatory delivery; and to advance or achieve regulatory outcomes.

RCFs goes further by describing the specific knowledge, skills and behaviours needed to perform, support or oversee regulatory work. These are not generalist skills; they reflect the unique demands of regulatory practice, such as:

• Regulatory craft and judgement – Apply legislation, exercise powers, make evidence-based decisions, and use discretion appropriately.

• Risk-based regulation – Assess hazards, risks, and impacts to focus regulatory effort where it matters most.

• Data-informed regulation – Use intelligence, analytics, monitoring tools, and digital systems to guide decisions.

• Compliance and enforcement – Select the right tool, understand compliance behaviour, and apply responsive, graduated and proportionate strategies.

• Regulatory stewardship – Design, review, and continuously improve regulatory systems.

• Ethics and independence – Manage conflicts, prevent regulatory capture, and ensure decisions are legal, consistent with policy, defensible, and transparent.

Regulation is complex, multi-disciplinary, and evolving—which is why a distinct capability framework is essential.

Refer to Image 1: Regulatory capability and organisational capability frameworks

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Two Frameworks, One Purpose: How Regulatory and Organisational Capabilities Work Together 

Some regulators may worry that having both an OCF and RCF could create overlap or confusion. In practice, the frameworks complement each other, providing a more complete approach to building regulatory capability and supporting regulatory success. Used together, they reinforce good practice, build confidence, and ensure consistency across teams. Without this clarity, capability development can be inconsistent, overly reliant on on-the-job learning, and vulnerable when staff leave or knowledge fades. 

Refer to: Table 1: OCFs vs RCFs: Purpose and Focus

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Together, OCFs and RCFs create a holistic picture of what good regulatory practice looks like.

A regulator who knows the technical details but lacks judgement, or someone with strong organisational skills but little understanding of compliance approaches, cannot perform well.

When RCFs and OCFs are used together:

• Recruitment – Targets hiring to the skills, knowledge, and behaviours regulators need, increasing role clarity.

• Development (Role induction, Training, and Continuing Professional Development) – Makes learning strategic, focused, and aligned with regulatory capabilities.

• Workforce planning – Reveals workforce strengths and gaps, enabling more effective, targeted development.

• Performance and career pathways – Clarifies the capabilities needed for career and professional growth.

• Regulatory quality – Strengthens consistency, defensibility, and alignment of regulatory decisions and regulatory practices.

By combining these frameworks, agencies can create a holistic blueprint for building a stronger, more confident regulatory workforce and system. This approach promotes consistent, capable, and credible regulatory practice across teams, regions, and contexts.

An RCF is not just a technical exercise—it’s also a cultural one. In practice, agencies need both frameworks to drive meaningful improvements in how regulators work.

Refer to: Table 2: Key Actions to Strengthen Regulatory Capability

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Conclusion

The increasing complexity of contemporary regulation means regulators need a unique mix of skills that no single framework can provide. OCFs help build strong workplace behaviours and leadership, but it is RCFs that define the specialised capabilities both desired and required for regulating more effectively.

When intentionally designed, developed, implemented, and continuously improved, an RCF becomes a natural part of how regulators work, review, and enhance their practice. By using both frameworks together, agencies can develop the full set of skills needed for effective regulatory practice. This produces confident, skilled, and capable regulators who can adapt, learn, and respond to new risks with professionalism and integrity.

RCFs are essential, not optional. They provide a purpose-built set of knowledge, skills, and behaviours that contemporary regulators require [[i]] – enabling them not just to keep pace, but to lead, innovate, and continually strengthen regulatory capability to deliver regulatory outcomes for society.