How the rule of law is important to business
18 May 2017
If you’ve ever seen Mad Max, you’ll have some understanding of the consequences of an unfair (or non-existent!) justice system. That’s where the rule of law comes in. The rule of law is a concept designed to keep life fair, just and orderly – and it also applies to businesses. To make the best decisions for you and your business, you need to understand how these laws work.
What is the rule of law?
The rule of law has no simple definition, but in its essence, it’s a concept that means no one is above the law. The rule of law means that there are clear, understandable rules that everyone has to follow – citizens, governments and businesses. It’s a way of keeping our justice system fair and ensuring that everyone complies with the law.
Why is the rule of law important to business?
If you imagine doing business without any legal means to protect your best interests, you’ll understand why the rule of law is important to business. The rule of law gives everyone a framework for how to act and operate. It holds people, businesses and government accountable for their actions.
Without predictable rules and patterns to follow, doing business would be chaotic. You would never know how another party would act in any given situation and it would be all too easy to be taken advantage of. The rule of law provides much-needed stability, consistency and certainty in a potentially volatile landscape. With the guidelines for universal acceptable behaviour clear and universal, it’s a lot easier to ensure that organisations act predictably and responsibly.
How does it impact Australian businesses?
There are rules in place to ensure that the way you do business is fair to you, your employees and your community. Everyone has to follow these rules and – ideally – there are universal consequences if you neglect to do so.
Workplace safety, hiring, wage issues and licensing are just a few areas where some business owners struggle to tick all the boxes. While the rule of law means that there’s clarity and consistency in rules and regulations, you still need to learn what the rules are.
If you own or work for an Australian business, you have to follow Australian law. When you neglect to do so, there are clearly outlined consequences. For example, Australia has laws governing minimum wage. When someone fails to comply with this law, there is certainty and clarity around how the matter will be dealt with, ensuring fairness and consistency. By understanding Australian laws, you can better identify legal risks and protect your business.
What are the risks of non-compliance?
Failing to comply with state and federal guidelines can have serious consequences for your business. That’s why it’s so important to know and understand the rules. If you don’t, you can be vulnerable to fines, lawsuits, audits – even having your business dissolved entirely.
If you’d like to broaden your understanding of the law and how it relates to your business, consider undertaking Southern Cross University Online’s Master of Business Law. By equipping yourself with valuable knowledge, you can make the best and most informed decisions for your business.
Learn more about this in-demand qualification by speaking to one of our expert Student Enrolment Advisors on 1300 589 882.