I confess that I am in two minds about the importance of self-regulation.
On the one hand, it seems relatively unimportant compared with the scale and importance of the regulation created by Parliament and discussed extensively elsewhere on this website.
On the other hand, Michael Moran (in the British Regulatory State) says that:
'The self-regulatory system in Britain is vast. Only a tiny tip ... shows up in any systematic listing. The very summit of the tip consists of a small number of consumer-sensitive fields - like funeral services and used car sales ... Part of the rest of the visible tip can be seen in [the government's] list of 199 trade associations, most of which have some kind of code of conduct. ... [Then there] is the world of regulation represented by organized professionals ..., and beyond this the worlds of quasi and and aspirant professionalism, of codes administered by charities and learned societies, of sport and leisure associations, and of cultural organizations ... [one example being the] pastoral codes of conduct for Catholic priests developed in the wake of sexual abuse scandals in the Church.'
Self-regulation should ensure that the process is sensitive to the practical needs of those being regulated. It also cuts the cost to the taxpayer. Often, however, pure self-regulation does not work because 'cowboys' refuse to be bound by it, and there is then a tendency for the bad to drive out the good. (The Times reported in 2017 that 'Self-regulation lets bad bailiffs go on working'.) It is common, in these circumstances, for at least some in an industry to prefer the regulation to be undertaken by an arm of government.
(Indeed, good "trusted" and fully independent regulation can be essential if an industry or activity is to thrive. We would not have a nuclear industry if the Nuclear Inspectorate were not regarded as effective, so that industry and its regulator have developed a sort of symbiotic relationship. Much the same applies to the Human Fertilisation and Embryology Authority. Following that thought, it is interesting that the Better Regulation Task Force recommended, in January 2003, that there should be a dedicated nanotechnology regulator:- 'Government has a difficult job in ensuring that scientific research can flourish, whilst at the same time confirming to the public that research being carried out is both ethical and safe.')
If state-organised regulation does not seem appropriate then there is a half-way house in which apparent self-regulation (e.g. of accountants, lawyers and doctors, and of financial institutions) is in fact carried out by bodies created by statute, although such bodies are dominated by representatives of the industry which they regulate. Newspaper self-regulation is particularly controversial.
And there is an obvious danger that even this sort of self-regulation can turn into over-sympathetic and/or inefficient regulation overseen by friends and colleagues. The Solicitors Regulation Authority was for instance accused of taking eight years to ban rogue solicitor Maitland Hudson.
The British Board of Film Classification is an interesting self-regulator.