New laws and regulations are usually met with groans of dismay.  They may require you to do things differently and the change in procedure can sometimes be costly.  It upsets established routines and interferes with our habits.

    Let’s face it: big brother edicts curb our independence and no one likes having something taken away from them.  It naturally invites resistance.

     Unfortunately our resistance to the perceived “loss” contributes to a major misunderstanding about the rule of law.  Its purpose is not to make your life miserable.  Its purpose it is to help you.  Help?  Yes, help.

     Laws, regulations, and even corporate policies, are created to help manage expectations and behaviors and to fix existing or potential problems.  I’ll admit that poorly drafted laws can at times create as many problems as they try to solve.  But that’s a separate issue.  The reflex reaction to rules – that big brother is watching – blinds us to the fact that the rule of law is a quality control mechanism.

     Yesterday’s New York Times headline “New Drug Label Rule is Intended to Reduce Medical Errors” is an interesting case in point.  The article explains how the new drug label rule is intended to simplify the reading of those accordion inserts with the tiny print.  The goal is to make it easier for doctors to spot the vital information necessary to prescribe the drug properly, thereby reducing injuries and deaths caused by medical errors – a valid and civilized objective.

    Understanding why a rule exists makes it easier to swallow and follow.  But all too often internal corporate communications don’t provide sufficient background or context and new rules are viewed as a burden instead of a tool.  It’s easier, for example, to focus on the inconvenience and cost associated with reformatting drug labels than on the benefit to the doctors and patients.

     Young children old enough to play together know that the first thing they need to do before starting a game is establish the rules.  Rules are important.  Not knowing or following the rules inevitably leads to cries of unfairness, conflict, and retribution.  In the business world such pushing and shoving leads to lawsuits. 

    If you’ve ever done business in a country with a poorly developed commercial rule of law you know that it’s tough.  The instability it creates threatens your ability to be treated fairly and you never know whether your contracts are worth anything. 

   That’s why the rule of law is of strategic importance to business.  A solid rule creates an environment in which fair competition and ethical businesses can flourish.  So the next time you want to dismiss some new law or regulation (that has completed its rite of passage through the lawmaking process), as interfering in your frontline responsibilities please note that:

• your organization is part of an interdependent market economy,
• the rule of law provides economic stability and a foundation for trust,
• it represents society’s expectations of civilized behavior, and
• spelling out those expectations lets you do a better job of carrying out your organization’s social responsibilities.

     That’s why legal literacy and respect for the rule of law is important.  A better understand shows you and your organization how to be part of the solution instead of the problem. 

This entry was posted on Friday, January 20th, 2006 at 11:29 am and is filed under Business Blind Spots, Compliance, Corporate Governance, Decision Making, Ethics, Leadership, Rule of Law. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.