The Document Retention Policy - An Important Part of Your Business's Operations
Many businesses have come to realize the value of having a document retention/ destruction policy as part of their regular operations. A policy that is well planned and consistently followed will help a business increase its efficiency, reduce its document storage costs, and protect itself from allegations that particular documents were destroyed because the company did not want them to become public in litigation.
A good document retention policy is more than a two-column chart listing categories of documents and a number of years the documents should be kept. A good policy will include a description of how the document retention (and document destruction) processes will be implemented, including assignment of responsibility among operational and managerial employees. The policy should specifically address retention and destruction of electronic documents, such as emails and web pages, as well as paper documents. Because most businesses already have some form of document retention policy, even if it is a haphazard one, implementing a well-planned policy will usually not increase the administrative burden on current employees.
The importance of a well-planned document retention policy is particularly important for litigation and risk management. When a business does not have notice that someone is anticipating filing a lawsuit against it, that business is unlikely to be sanctioned by a court for destroying records relevant to the would-be plaintiff’s claims – if the records are destroyed pursuant to a standardized, documented destruction process. Without a formal policy to point to, however, a business will have a difficult time explaining to the court why, for example, Former Employee A’s records were destroyed but Former Employee B’s records were not.
A document retention policy can also improve a company’s bottom line. For example, a formal policy is likely to provide a business with the comfort needed to finally throw away the 10-year-old records stored in a back office. The former “storage room” is now available for a revenue-generating employee or other business needs. Similarly, when the policy includes procedures for the systematic destruction of unimportant emails, the company will effectively increase its server capacity without making a capital expenditure, which satisfies both the CIO and the CFO at the same time.
Creating a good document retention policy is rarely difficult or time consuming. The process usually requires one or two brief meetings between an attorney and a representative from a company’s accounting, operations, human resources, and information technology departments. A manager-level or similar employee with some tenure at the company is often a good choice to work with the attorney to identify the organization’s current document handling and storage procedures and to develop a formal retention policy that protects the company while not creating an administrative burden on current employees. Companies that have most or all of their operations in a central hub office can usually have a custom-made document retention policy within 30 days of starting of the process.