A business dealing with sensitive information shall need a document retention policy. The specifics of a document retention policy could vary from company to company, some general principles are there which all businesses must follow. In article discussed below, a document retention policy is discussed as well as why it is needed-
Document retention policy-
A document retention policy, helps ensure that a company would keep track of documents generated, including the employment contracts, invoices, medical records, etc, as well as retain them for an appropriate period of time.
It also specifies as to what kind of documents would have to be retained, for how long they should be kept for, also who shall be responsible for maintaining them. It helps companies keep the information organized as well as accessible. Also, the document retention policy helps ensure that the company is compliant with necessary regulations, protecting them in case of potential litigation.
How to Prepare a document retention policy ?
A document retention policy must answer two important questions:
what type of documents are generated in the business and
how long they must be kept
After deciding the kind of documents required to be retained, one would have to determine for how long these documents must be kept. It may vary depending upon the kind of document it is and the purpose it serves. Say for example, a financial record such as an expense report would have to be kept for years, on the other hand the personnel files could be destroyed after a period of six months after they've left the company.
The document retention policy must ensure that these points are clear so that the employees are aware as to what is expected of them. It is advised to review and update the policy on a regular basis, as well as to ensure that such policy meets the changing demands of the business and regulations.
Reasons Behind The Document Retention Policy
There could be various reasons as to why a company should have a document retention policy. It is important for such companies who handle confidential information, so as to ensure that all necessary documents have been disposed of in a timely and proper manner. In case of other companies, the reasons to have a proper document retention policy include:
Staying compliant
Compliance with local and industry regulations is necessary in any case, but for a globally-connected world, document retention and data storage compliance is more of an important issue than ever.
Based on the industry and location, there could be certain legal documents which one is required to keep on file. A document retention policy shall ensure that one is in compliance with each relevant law.
Protecting the business
Drafting a proper document retention policy would help to defend the business in the event of a lawsuit or any other legal action.
Such legal action may vary from anything including the cybersecurity breach to the lack of a Slack policy.
The data retention policy would help provide record of what has been done and said and when, which could be critical to defend the company and staff against such allegations from former employees, "patent trolls", or the competitors.
Supports decision-making
A document retention policy shall help ensure that all required documents related to the business have been kept safe and organized. In this manner, when a decision is required to be made, one could easily find the information needed to make an informed decision.
Access control
By drafting a formalized policy, one could be ensure about the secure document sharing and that authorized personnel would only have access to sensitive data.
This shall help one protect the organization from matters related to data breaches, legal liabilities, unauthorized access to confidential documents, etc.
And in the event that there is a security incident where one needs to track down as to shall have access to what areas of the storage room or any shared folder.
By confirming as to who will have the access to what, you could more easily determine the responsibility for any unauthorized activity.
Protection of documents
It is necessary for a business to have a proper system in place in order to protect the documents. A document retention policy will help to ensure that the documents have been properly stored and protected from the issues of unauthorized access or destruction.
One reason shall be to comply with regulatory requirements. For instance, some industries would have to keep certain records for a certain period of time.
Another reason for drafting a data retention policy is to protect the company from any legal liability. In case a company has destroyed such documents which could be relevant for a lawsuit, such as a waiver protecting them from any liability, the company will be held responsible for mishandling such evidence.
Also, a document retention policy will help prevent any instances of data breaches by ensuring that such sensitive information has been properly protected.
By having standardized such procedures, would help ensure that documents have been organized in a safe, consistent, and efficient manner across several offices of the company.
Document retention in a ever-evolving world
Digital transformation is an ever evolving performa, which impacts the way a company deals with its documents, including the e-Signatures to a PDF file, QR code generator, to global regulations including the GDPR.
With such advancement, the process of handling and storage of such documents has become more complex; it is, therefore, important to have clear procedures set in place. If physical or all-digital, a document retention policy is important for any company which wants to protect its customers, staff, as well as assets by keeping the information secure.
To ensure that the company has a water tight security system, it is important to seek assistance from an experienced advocate to help frame various policies which shall be legally valid, so as to avoid future problems.
Lead India offers you a team of experienced advocates who have been successfully handling cases related to issues dealing with corporate law. Thus, if you wish to seek free legal advice online or talk to a lawyer, you may contact us.
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