According to John Green (FAICD), Australia has more laws than cicadas but at least the cicadas have the grace to die after they’ve done their duty. The same could not be said for the ever-increasing chasm of legislative compliance requirements bestowed upon organisations.
Is the end to this maze of regulation in sight with the Abbott government’s new agenda for deregulation? Josh Frydenberg (secretary to Prime Minister) is leading the challenge to try and eliminate extensive duplication and regulatory overlap.
Too often (and we’ve all done it) organisations approach corporate governance as a compliance box ticking exercise. Does just trying to comply equate to striving for mediocrity? Should we not be guided by the fundamental concepts of good governance around integrity, transparency and accountability?
Ultimately regulatory compliance needs to have clarity of purpose to effectively manage risk in a cost effective way in order to maximise organisational productivity. This is particularly pertinent to small business.
A recent Productivity Commission report Regulator Engagement with Small Business recognised that “where regulators view their role as assisting business to comply with their regulatory obligations, better regulatory outcomes are likely to result – higher rates of compliance, lower compliance costs for business and an increase in overall community welfare.”
Let’s hope the government agenda for deregulation will reduce the feeling at board and executive levels of being so bogged down in compliance there is insufficient time to focus on delivering key strategic business objectives and increasing organisational productivity.