External regulations have increased for the\n\nmajority of businesses and senior executives and managers are feeling\n\nthe weight in the form of increased workload.\n\n\n\nThis trend is not healthy for business, as more executives and\n\nmanagers become consumed with external rules that, in some cases, may\n\ncost companies increasingly larger amounts of time and money. Four-fifths of senior executives and managers say that in the past\n\nfew years the amount of external regulations (government regulations,\n\nrules, Sarbanes-Oxley [SOX], etc.) affecting their department or\n\norganization has increased. And half of those say it has increased\n\ndramatically, in a nationwide survey we conducted over a base of more\n\nthan 1,000 companies. The real question is how much these various regulations have aided businesses. \u201cThe sad thing is that I don\u2019t see where the increased regulations\n\ntruly help the intended constituents and the cost to businesses\n\n(ultimately consumers) is substantial,\u201d said one survey respondent. However, in the wake of Enron, WorldCom, etc., it could be argued\n\nthat at least in some cases external regulation was necessary. \u201cThese controls should already have been in place as part of\n\nrunning the business,\u201d said one respondent. \u201cThey were externally\n\nimposed because we were not doing it.\u201d But if not careful, external regulation can become excessive, with rules designed for some being applied to all. \u201cSOX auditors need to have differentiation on how they audit huge firms versus smaller firms,\u201d said one respondent. Said another: \u201cFinancial industry regulations, especially with privacy regulations, have escalated exponentially.\u201d The burden of increased external regulations falls to senior\n\nexecutives and managers who have to work more or harder to assure that\n\ntheir part of the business complies. Almost three-fourths\n\nof executives and managers say their personal workload has increased as\n\na result of external regulations. This at a time when there is little\n\nif any extra time other than what is needed to get the job done. \u201cI appreciate the need to provide documentation of our processes,\n\nbut the added levels of bureaucratic activity and the unnecessary\n\nduplication of effort detract from overall productivity,\u201d said one\n\nsurvey respondent. \u201cAt the end of the day, no amount of checking the\n\nchecker will prevent unprincipled people from cheating. It will just\n\nchange the method.\u201d \u201cSOX has resulted in\n\nnearly all improvement and progressive programs being put on hold,\u201d\n\nsaid another respondent. \u201cIt is consuming massive staff time and is\n\nundoing past office lean initiatives. All this for a company that was\n\nalready technically compliant. Yes, the SOX unemployed auditors welfare\n\nact has increased our workload.\u201d Said one senior\n\nexecutive at a smaller company: \u201cThe average cost of regulation\n\ncompliance for small businesses is $7,000 per year.\u201d \n\n\u201cRegulations in general and Sarbanes-Oxley in particular have been a\n\nhuge drain on management time and financial resources,\u201d said one\n\nrespondent. \u201cThere has been very little benefit to shareholders or\n\nmanagement. Thankfully, the tide is turning slightly in 2005.\u201d While\n\nsome regulation, such as enforcing proper accounting to protect\n\nshareholders, can obviously be beneficial to many businesses, too much\n\nregulation can cause a company to be more focused on compliance and\n\nless focused on the actual business and its customers, to the ultimate\n\ndetriment of everyone.