June 20, 2004

The Financial Times has revealed that business is to have a say in tackling red tape. Adam Christie argues that it only has itself to blame for the difficulties it faces.


Think, spend or be regulated: the blame lies at your front door

FEW bleatings are guaranteed to elicit less sympathy than business leaders complaining that they are 'overburdened' with regulations and inspections.

Why? The answer is straightforward: business is usually blame for circumstances which have forced lawmakers to enact legislation to try to prevent any repetition.

Look at most regulations facing business: they are there to protect their staff, their owners, their customers or their users. Who else is there?

If train operators face increase safety stringency, it's because somewhere along the line, someone involved with them has 'cocked-up' and lives have been lost.

If environmental health officers take action against a small fast-food purveyor, it's most likely because the food being served might give the consumer more than was really wanted.

If financial institutions face tighter audits, it's because managers have put too much pressure on an already over-zealous, under-trained sales representative who has avariciously given commission a greater priority than a customer's pension.

If nursing homes or private hospitals kill someone, then the deceased's parents, children, friends and colleagues emotionally demand 'action'; politicians respond.

If business wants fewer regulations, then the alternative is that business keeps its own house in order.

That costs. Usually errors occur because a bean counter somewhere has too enthusiastically tried to save pennies to please that quarter's shareholders. Once again, short-termism is indirectly to blame.

If business will not invest appropriately to protect those it needs most - such as owners, customers and staff - then clearly we all need to change our hats to become the affected and 'the state' and pressurise our politicians to act for us.

If senior executives are too weak to persuade shareholders, especially the dividend-greedy institutional investors acting for us too, that we can't have the profits from our investments quite as quickly as we would have liked, then they're not fulfilling the wider implied remits of their job descriptions.

As with so much in life, the circle is vicious - and attitudes change like hats.