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Hector Sands, chief executive of the Financial Services Authority (FSA), used a conference speech to suggest that regulators should be more active in shaping company culture to prevent a repeat of the economic slump.
Addressing the Chartered Institute for Securities and Investment in London, he said that regulators have stayed away from this kind of matter before in fear of being seen as judgmental.
But he added: "Given the issues we continue to see over time, I believe this one-dimensional approach has to be questioned."
Mr Sands called for greater attention to be paid to how a company affects society beyond its own shareholders.
An independent organisation, the FSA is the UK's financial regulator and its powers are set out in the Financial Services and Markets Act 2000.
It is funded by the companies that fall under its regulation, not by the government.
Posted by Greg Secker
