Remember the movie The Odd Couple? Oscar was the incurable slob while Felix was the neatnik. That combination made for some great comedy. It’s not so funny in the workplace if you’re a Felix trying to find an important piece of business information in an “Oscar” file. It can also kill your defense in a lawsuit. Missing information can result in sanctions from the court or worse – you could lose the case. Here are four tips to protect your company and avoid a document retention disaster.
1. Have an easy to understand record retention policy.
An effective policy tells employees what business records they need to keep and for how long they need to keep them. If the policy is too complicated it will be ignored. The result will be either non-compliance or overkill. Non-compliance can cause difficult to explain gaps in record. Overkill, the practice of keeping absolutely everything, can actually increase the cost of a lawsuit because more documents will now need to be reviewed by lawyers and paralegals. Ca-ching! Knowing how and when to legally clean out the clutter in your files can save you time and money.
2. Tailor the policy to fit your business culture and the law.
Tax records and financial documents have specific retention periods established by law. Other types of documents do too. You’ll want to make sure your record retention policy captures all of the legal retention requirements applicable to your specific business. At the same time you’ll also want to the policy to be practical and user friendly.
Employee focus groups are a great way of gaining insight about what documents your company generates and receives. The feedback lets you tailor your policy to fit your employees’ work flow. The process of engaging your employee in the process increases their understanding about the scope and purpose of the policy and creates more employee buy-in that in turn yields more compliance with the policy and greater success.
3. Include IT in the development and implementation of the record retention policy.
Tthe information superhighway consists of a paper trail in addition to an electronic trail. Since IT sits at the head of the technology infrastructure, it’s critical that they be involved in developing and implementing your record retention policy. They can also help map technology and software changes that hold the key to unlocking old back-up files and other storage media.
4. Publicize your record retention policy internally.
If your employees understand the hows and whys behind your document retention policy they will be better equipped to carry out their critical role in the policy’s success. While knowing what to toss and what to hold is a key part of the training, it should also include a discussion of the “litigation hold.”
A litigation hold requires all documents relating to the suit be preserved until the case is resolved. It overrides the document retention policy and should be issued immediately after your business has been sued, or has been threatened with suit. It only applies to documents related to the suit. Failure to understand the meaning of a litigation hold proved fatal for premier accounting firm Arthur Andersen after one of it’s partners held an Enron file shredding party after the firm received word it was the subject of a government investigation. Don’t let it happen to you.
Good business record management practices help keep your papers and virtual documents at your finger tips, making easy to find the information you need when you need it. It sounds like a boring housekeeping function that only a Felix could love; but, even your “Oscars” can appreciate the important role they play in protecting the lifeblood of your business: your business data. A good document retention policy is an investment in business sustainability.
For more information about record retention practices, see The Sedona Guidelines for Managing Information & Records in the Electronic Age and ARMA (formerly known as Association of Records Managers and Administrators).