Just finished Dov Seidman's book How. Apart from his views on the challenges facing business today, the most fascinating parts were his insights into why imposing stronger laws like Sarbanes-Oxley will get us nowhere.

Seidman argues that in this highly connected world of blogs, web sites and instantaneous news, 'how'' you live your life and ''how'' you conduct your business matters more than ever, because so many people can now see into what you do and spread the word. And because "what" you do is quickly copied by everyone, ''how'' you engage your customers, ''how'' you keep your promises and ''how'' you collaborate with partners becomes critical and your competitive advantage.

I have some reservations with the argument. Certainly, how you go about your business is more important these days but the "what" is still critical for bringing the money in.

That said, Seidman uses his thesis to draw some interesting views on the effectiveness of laws like Sarbanes-Oxley. Having too many laws and rules, he says, can create an environment where we are less conscious about what is right because we are always trying to dance around them:

"Human conduct is more complicated than what the language of law can describe. Human conduct, in its infinite variety and creativity, defies reduction. It has a lot to do with aspirations and intentions, with back-and-forth interactions. Our interpersonal synapses are two-way streets, and the interactions that travel through them are dynamic. Rules, because they are made reactively, have difficulty keeping up with the infinite permutations and various shades of meaning that pass between people in the course of life."

Seidman says there are 10 problems with relying on laws and rules:

1. Rules are external. They are made by other people, presenting us with puzzles to work out and loopholes to find.

2. We are ambivalent about rules. We know we need them but say "Rules are meant to be broken".

3. Rules are reactive. They respond to past events.

4. Rules are both over- and under-inclusive. Because they are proxies, they can't be precise.

5. Proliferation of rules is a tax on the system. We can't remember them all and spend time chasing them all up.

6. Rules are typically prohibitions. They tell us what we can and can't do, which means they are constricting and narrow.

7. Rules require enforcement. As a result, they create bureaucracies of compliance.

8. Rules create boundaries and floors but create inadvertent ceilings. You can't legislate "The sky's the limit".

9. The only way to honor rules is to obey them precisely. If you want to excel, it has to come from somewhere else.

10.Too many rules breeds over-reliance. We think "If it mattered, they could made a rule."

Good insights that explain why Sarbanes-Oxley will never stop fraud 100 per cent.