Watch the video in a new window

Key principles of business law that are the foundation for conducting business are:

Simplicity

  • laws that govern business should be stringent but not complex
  • compliance should not impose substantial cost burdens on business
  • laws defining business structures should be limited in scope and easy to understand
  • in many countries the burden of regulation on business has grown significantly over the last century. Countries could consider adopting sunset clauses where the law expires automatically at a certain date
  • lawmakers should consider the surrounding and political environment to ensure interactions with business law does not drive enterprises to unnecessary or undesirable behaviours.

Openness and transparency

  • lawmakers should be open and transparent with business when designing and implementing laws
  • governments should consult before implementing new laws; they need to ensure laws designed to benefit wider society do not inadvertently introduce sanctions, incentives or barriers that distort business behaviour
  • businesses require a predictable environment to create the greatest returns
  • businesses can plan long-term if government indicates future intention and direction. This helps business planning and general economic stability.

Fairness

  • business law should be applied consistently and equally across enterprises
  • if businesses believe laws have been designed for the wider public good they are more likely to see the law as legitimate, adopt it and follow it
  • countries should co-operate to encourage enterprise, avoid protectionism and unjustified trade sanctions
  • governments must step in where legitimate commercial exploitation becomes abuse. They should act to break up cartels which stifle competition
  • laws designed to deal with the one group should not disadvantage others– for example regulation for large companies may have to be dis-applied to smaller entities, who would not have the resource to comply and where the burden would not repay the benefit.

Accountability

  • business law should encourage accountability and foster trust
  • businesses should be encouraged to communicate with stakeholder, for example through publishing annual reports
  • through the legal framework stakeholders should have confidence that company disclosures are complete, comparable and reliable.


About Jason Piper, lead author, ACCA

Find out why we're asking for feedback