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Legal compliance: it’s not just a business decision
By Lauren | May 13, 2008
Lately, I’ve noticed a disturbing attitude emerging from some companies with respect to legal compliance. Maybe it’s a product of too many cost-benefit analyses, but it seems that, with increasing frequency, companies are treating legal compliance as optional rather than mandatory. They weigh the costs of getting caught against the short-term profits they can garner by sidestepping legal requirements, and then make a “business decision” about whether or not to comply.
This is not a good idea.
To demonstrate my point with a simple example, let’s talk about highway speed limits. They’re posted every few miles and everyone knows what they are, but highway traffic typically runs about nine miles an hour faster than the posted limits. Most of the time, nobody gets hurt. However, although speed limits may seem arbitrary and even stupid to the average driver, they reflect more careful consideration by legislators than you might think. Speed limits are determined based on everything from how bad a crash is likely to be at different speeds to how much gasoline cars typically burn. (They’ve probably even factored in drivers’ tendency to go a little faster than the signs say they should.) On a nice day with light traffic you might think you’re perfectly safe going faster than the limit, but keep in mind that the people who set that limit thought a lot longer and harder than you did about what made sense before putting the limit in place. If you end up in an accident, you’ll never know whether going a little slower might have prevented the accident altogether or at least reduced the damage done, and you’ll risk seriously injuring someone else who had no opportunity to argue with you about whether you should have slowed down.
It can be a lot of fun to bash the politicians, but they’re in office because a majority of people who cared enough to vote thought they were the right people to carefully analyse the public good, explore alternatives, and come up with the right rules for how we should deal with one another. Their decisions, reflected in the laws and regulations that govern business, are deserving of respect. I’ll be the first to acknowledge that lawmakers get it wrong sometimes, and that legal requirements that look great on paper don’t always play out well. If your company finds itself in a situation where you’re having to satisfy laws that create serious obstacles to your legitimate business success, tell your legislators and regulators. Lobby for change, get your customers to complain to their representatives, or run for office yourself and change the law, but don’t disregard it. If the day ever comes when short-term profit trumps the law, we’ll all be in a lot of trouble.
Topics: Business Ethics, Corporate Governance, Social Ethics, corporate responsibility |