It's amazing how often the grown-up business world seems to replicate childhood - especially junior high school. In junior high, there are always a few people - bullies, snobs and other self-styled "cool kids" - who decide that the rules do not apply to them. Inevitably, their misdeeds, whether heinous or merely annoying, become impossible to ignore. The result? A new set of more-stringent rules that make life more difficult for everyone.
Similarly, in the business world, there are regulations, laws and guidelines by which most people abide, even if some of those rules seem unnecessarily complicated, outdated or petty. But inevitably there are people - sometimes outsiders who want to steal or vandalize just for the fun of it, but also executives and other employees who simply decide that the rules don't apply to them - who ruin it for everyone. This kind of arrogance almost always results in increased and even more-complex regulation.
Sarbanes-Oxley is the perfect example. Whether or not you think the regulation is realistic, annoying or essential, it cannot be denied that it was promulgated in response to a series of highly destructive actions on the part of two groups of individuals: those who believed the rules did not apply to them and those who knew better but couldn't be bothered to set an example by paying attention to the rules and enforcing them.
Given human nature, it's unlikely things will ever change. (Consider Congress' recommendation that the country needs a national anti-steroid policy if you have doubts.) Last month's series of CEO dramas (i.e., WorldCom's Bernie Ebbers convicted of fraud and likely to go to prison for life, the Eliot Spitzer-pressured resignation of longtime AIG CEO Hank Greenberg and Martha Stewart's release from jail) are noteworthy because they involve chiefs who actually were held accountable. Ebbers unbelievably claimed ignorance of what was going on at the company; Greenberg evidently thought he was untouchable.
Among those who have to not only live with the new rules but also figure out how to do so are the junior high school grinds and geeks. In banking, it's the CIOs and other technology executives who must figure out how to stretch limited IT resources to provide the documentation, transparency and accountability the new regulations demand. It might not be fair, but it's definitely reality.