External regulations have increased for the majority of businesses and senior executives and managers are feeling the weight in the form of increased workload. This trend is not healthy for business, as more executives and managers become consumed with external rules that, in some cases, may cost companies increasingly larger amounts of time and money. Four-fifths of senior executives and managers say that in the past few years the amount of external regulations (government regulations, rules, Sarbanes-Oxley [SOX], etc.) affecting their department or organization has increased. And half of those say it has increased dramatically, in a nationwide survey we conducted over a base of more than 1,000 companies. The real question is how much these various regulations have aided businesses. “The sad thing is that I don’t see where the increased regulations truly help the intended constituents and the cost to businesses (ultimately consumers) is substantial,” said one survey respondent. However, in the wake of Enron, WorldCom, etc., it could be argued that at least in some cases external regulation was necessary. “These controls should already have been in place as part of running the business,” said one respondent. “They were externally imposed because we were not doing it.” But if not careful, external regulation can become excessive, with rules designed for some being applied to all. “SOX auditors need to have differentiation on how they audit huge firms versus smaller firms,” said one respondent. Said another: “Financial industry regulations, especially with privacy regulations, have escalated exponentially.” The burden of increased external regulations falls to senior executives and managers who have to work more or harder to assure that their part of the business complies. Almost three-fourths of executives and managers say their personal workload has increased as a result of external regulations. This at a time when there is little if any extra time other than what is needed to get the job done. “I appreciate the need to provide documentation of our processes, but the added levels of bureaucratic activity and the unnecessary duplication of effort detract from overall productivity,” said one survey respondent. “At the end of the day, no amount of checking the checker will prevent unprincipled people from cheating. It will just change the method.” “SOX has resulted in nearly all improvement and progressive programs being put on hold,” said another respondent. “It is consuming massive staff time and is undoing past office lean initiatives. All this for a company that was already technically compliant. Yes, the SOX unemployed auditors welfare act has increased our workload.” Said one senior executive at a smaller company: “The average cost of regulation compliance for small businesses is $7,000 per year.” “Regulations in general and Sarbanes-Oxley in particular have been a huge drain on management time and financial resources,” said one respondent. “There has been very little benefit to shareholders or management. Thankfully, the tide is turning slightly in 2005.” While some regulation, such as enforcing proper accounting to protect shareholders, can obviously be beneficial to many businesses, too much regulation can cause a company to be more focused on compliance and less focused on the actual business and its customers, to the ultimate detriment of everyone. Related content brandpost Sponsored by SAP When natural disasters strike Japan, Ōita University’s EDiSON is ready to act With the technology and assistance of SAP and Zynas Corporation, Ōita University built an emergency-response collaboration tool named EDiSON that helps the Japanese island of Kyushu detect and mitigate natural disasters. By Michael Kure, SAP Contributor Dec 07, 2023 5 mins Digital Transformation brandpost Sponsored by BMC BMC on BMC: How the company enables IT observability with BMC Helix and AIOps The goals: transform an ocean of data and ultimately provide a stellar user experience and maximum value. By Jeff Miller Dec 07, 2023 3 mins IT Leadership brandpost Sponsored by BMC The data deluge: The need for IT Operations observability and strategies for achieving it BMC Helix brings thousands of data points together to create a holistic view of the health of a service. By Jeff Miller Dec 07, 2023 4 mins IT Leadership how-to How to create an effective business continuity plan A business continuity plan outlines procedures and instructions an organization must follow in the face of disaster, whether fire, flood, or cyberattack. Here’s how to create a plan that gives your business the best chance of surviving such an By Mary K. Pratt, Ed Tittel, Kim Lindros Dec 07, 2023 11 mins Small and Medium Business IT Skills Backup and Recovery Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe