Skip to content

Compliance Building

Doug Cornelius on compliance for private equity real estate

Menu
  • Home
  • About
    • About
    • About Doug
    • About This Website
    • Why I Blog
    • Speaking Engagements
    • Contact
    • Publications
  • Archives
    • Topic Archive
    • Book Reviews
    • Most Popular
  • Subscribe
  • Disclaimers
    • Disclaimers
    • Policies and Procedures
    • Use of Site Content
    • Comments
    • FTC Disclosure
Menu

Complexity

Posted on May 23, 2012 by Doug Cornelius
Print Friendly, PDF & Email

Does your policy look something like this sign? This is a real sign that was posted near schools on Bogie Lake Road in White Lake, Michigan.

The speed limit is normally 45 on that street, except during these half hour periods on school days when the speed limit drops down to 25, except the first period which is only 26 minutes. The end result is that drivers need to almost stop in order to read the sign. Presumably, they also need to make sure their watch is precise because they can travel at 45 mph at 6:48 am, but need to slow down to at 6:49 am. They need a copy of the school calendar to determine if it’s a school day, and not merely a work day.

The sign became complex because of cost, the underlying regulations, and the surrounding environment. The complexity is there for a good reason. There are three schools on that stretch of road, a high school, a middle school, and an elementary school. As you might expect, each school has different pick up and drop off times, resulting in different times that drivers need to be aware of the extra traffic and danger of children in the area.

The size and style of the sign is strictly regulated, so the sign maker has limited flexibility.

Because of cost, the sign designer puts the burden on the driver. Another choice would have been a “school speed limit only when lights are flashing” sign. But that costs significantly more than the this sign. That shifts the burden to the municipality to pay the additional cost to put up an automated sign. By the way the cost is significant: $50,000.

The complicating factor is that three schools are clustered together. That is unusual and clearly the rules for signs were not designed to deal with that type of complexity.

I assume by the strict rules for school speed zones, they only apply during the drop-off and pick-up time for each school. That leaves a gap in the times. The hours could have been from 6:49 am to 9:07 am and 2:03 pm to 4:29 pm. Presumably, the sign maker thought that choice was unduly strict.

The sign is complex because the underlying rules are complex. (I’m sure you can think of your own policies that are complex because the underlying law is complex.)

Perhaps one of the goals of compliance should be to craft simpler policies out of the complex maelstrom of applicable laws. That will ultimately limit employees from taking actions that would be permitted by the underlying law. The trade off is a policy that’s simpler to understand. After all, if you can’t understand the policy or easily figure out if it applies to you, then compliance with the policy is only a matter of luck.

Thankfully, the sign was removed and replaced by a simpler sign.


View Larger Map

Share this:

  • Print (Opens in new window) Print
  • Share on Facebook (Opens in new window) Facebook
  • Share on LinkedIn (Opens in new window) LinkedIn
  • Share on X (Opens in new window) X
  • Email a link to a friend (Opens in new window) Email

Leave a ReplyCancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Search for Stuff

Recent Stories

  • The SEC 2026 Rulemaking Agenda
  • The Alignment Gap: Rethinking Costs in Private Equity Fund Formation
  • PERE 100 and SEC Registration
  • Neither Admit Nor Deny To Be No Longer
  • What Will Form PF Look Like Next Year?
  • Is It a Chipset or Is It a Security?
  • When the Lawyer Is Breaking Bad
  • Will Investors Have an Appetite for Semi-Annual Reporting?
  • Special Forces Trading on Insider Knowledge
  • Prediction Markets and Compliance Programs

Fight Cancer

Please support my Pan-Mass Challenge
Make a donation to fight cancer. donate.pmc.org/DC0176
pan-mass challenge badge

I am a lawyer, but I am not your lawyer. Since I’m a lawyer, this website may be considered attorney advertising under the ethical rules of certain jurisdictions. Please read my disclaimers page before taking any action. And then, don't take any action based on what I wrote.

Creative Commons logo with the text 'Some Rights Reserved' and three symbols representing attribution, non-commercial use, and share alike.

Compliance Building - by Doug Cornelius is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.