Governance, Risk & Compliance: GRC
Company Policies: The Need for Regular Review and Revision
Company policies are more than just guidelines. They form the very fabric that binds an organization together. They delineate expectations, outline procedures, and ensure every stakeholder is on the same page.
However, despite company policies’ pivotal role in the smooth running of a business, oftentimes, these policies remain static, trapped in a time warp of sorts, untouched and unreviewed for extended periods.
For example, if a company failed to revise its manual in the past decade or so, it probably lacks many important pieces of critical information, such as an updated social media or smartphone policy for employees and the company at large, COVID-19 health and safety protocol information, and so on, potentially causing grave compliance risks.
Outdated or inconsistently enforced policies can expose businesses to liability, even if they no longer pertain to current activities. Policies must be regularly reviewed, revised, and either consistently applied or removed to prevent potential legal repercussions.
Furthermore, ignoring new threats or legislative changes can also further increase liability. It is important to therefore adapt to evolving risks, especially in areas like cybersecurity and personal data protection. Assigning a team to monitor such changes and consulting experienced counsel is crucial to maintaining a safe business environment.
To safeguard against potential risks and ensure a resilient business framework, proactively review and adopt policies in line with current challenges and legislative shifts. Only through vigilance and continuous adaptation can businesses truly mitigate liabilities and foster a secure operational landscape.
Why is Regular Review Overlooked?
There are several reasons why companies might neglect the regular review of their policies. For many, the primary reason is complacency. Once a policy is in place, it is perhaps easy to assume it will always remain relevant. Time constraints and competing priorities can also play a role, pushing policy reviews to the back burner. For some, there may be a lack of awareness regarding the importance of keeping policies up to date, leading to inadvertent lapses.
The Ideal Frequency for Policy Review
While the exact frequency of policy reviews might differ based on the industry and specific regulatory environment, a general best practice is to review company policies annually. This ensures they align with any changes in ever-evolving local, state, and federal industry regulations, company goals, and best practices. For instance:
- Data Protection Regulations: With the introduction of the General Data Protection Regulation (GDPR) in the European Union, companies worldwide had to revisit and update their data handling and privacy policies to ensure compliance, even if they merely had EU citizens as customers
- Environmental Standards: As nations globally adopt more stringent environmental protection measures, businesses in manufacturing or energy sectors might need to revise their environmental and sustainability policies to stay compliant
- Workplace Safety Amidst Pandemics: COVID-19 forced companies globally to introduce or amend health and safety policies, reflecting new hygiene standards and remote working protocols
In time, additional unexpected events, such as shifts in market dynamics or global disruptions, might necessitate more frequent reviews.
Key Considerations During Review
During the revision process, companies should:
Ensure Compliance with Regulations: The compliance landscape is in constant flux. Ensure policies align with the latest industry and governmental regulations to avoid potential legal repercussions.
Reflect Company Growth and Changes: As companies expand or evolve, their policies should too. Consider any recent changes in company size, structure, or strategy.
Consider Feedback: Gather feedback from employees and stakeholders. Their day-to-day experiences can provide valuable insights into where policies might be lacking or where they can be improved.
Assess Clarity and Usability: Ensure policies are compliant, clear, and user-friendly. The best policies are those that employees can easily understand and implement.
Triggers for Immediate Review
While annual reviews are a good practice, certain triggers might necessitate an immediate review of policies. Just a few include:
- Regulatory Changes: Whenever there’s a significant update in industry regulations
- Incidents or Breaches: If there’s a security breach or a significant incident, it’s a clear sign that current policies might need revision
- Major Company Changes: Mergers, acquisitions, or entering new markets can all be triggers
- Feedback from Stakeholders: If employees or other stakeholders raise consistent concerns about a particular policy
Next Steps After Review
Once a policy has been reviewed and, if necessary, revised, communicate those changes effectively. This may involve training sessions, workshops, or simply disseminating the updated policy to all relevant parties. Regularly auditing the company’s adherence to these policies can also be beneficial, ensuring the organization remains on track and any deviations are promptly addressed.
Final Thoughts
Regular review and revision of company policies are a matter of compliance and are central to the health and success of an organization. By ensuring these policies are current and relevant, companies can operate more efficiently, reduce risks, and foster an environment of clarity and trust.
Learn More
SAI360 recently launched an updated version of its Policy Manager module with advanced reporting features that provide a broad set of metrics for insight into policy and procedural compliance performance.
