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Putting an effective records management program in place can give your organization a huge advantage in reducing many of the risks associated with potential litigation. Following is one example, told to me by a records management expert who has consulted with and implemented solutions for some of the country’s largest enterprises.

At the center of the story is a records manager for a food manufacturer who wrote a business case designed to help protect the company against Superfund problems. (A Superfund site is a toxic site placed on a list of sites requiring clean-up mandated by the Environmental Protection Agency.) The records manager presented the case to senior management and argued that while implementing a records program would incur costs, it would help protect the company from Superfund lawsuits. A key issue was that the company had numerous boxes containing insurance contracts that protected the company against future insurance claims. However, because the contracts had never been indexed or inventoried, it would be virtually impossible to locate any of them in a timely manner.  

The proposed records program was approved. After the records manager implemented the program, the company was sued for Superfund cleanup. With the organization’s contracts in order, the records manager located an old insurance contract, still valid, that held the company faultless. The insurance company paid the fine, totaling approximately $5 million dollars. The company saved a significant sum of money, countless potential legal headaches and possible reputation damage because its records manager knew the benefits of a high value program

What are some elements of a high value program? A recent survey conducted by Canon (News - Alert) Business Process (On the Record: Is Your Organization’s Record’s Management Program Providing High Value or High Risk?) examines how an effective records program is critical for effective governance, risk management, litigation preparedness, reputation protection and strategic decision making. The findings spotlight the extent to which companies are adopting industry-accepted best practices and principles in their records management programs.

Here are three key findings:

1.    Conducting risk and records needs assessments are opportunities for some organizations to optimize their program.

Two best practices represent significant opportunities for some companies to improve their programs and reduce potential risk. One of these best practices concerns records retention: Only 15 percent of executives surveyed said that their organization has implemented a risk assessment to determine appropriate records retention periods. One of the important reasons for aligning with this principle is that many companies wrongly assume their insurance firm will cover a claim if they encounter a problem. This may not be the case if the insurance firm believes the claim involves gross negligence. And increasingly, gross negligence is being defined as not having an adequate records program in place, or not having one at all. A risk assessment is one way to help avoid this situation. 

The other best practice is to conduct a records needs assessment to uncover opportunities for closing gaps between the program’s current state and desired future state. Fifty-two percent of respondents indicated that their organization either has not conducted a needs assessment (38%) or they don’t know (14%). Some organizations overlook this practice because they don’t have the time or resources to address problems that such an assessment might uncover. For these companies, one solution is to engage the expertise of a records management services provider. Teaming with the right provider, the company can obtain a more objective viewpoint into the program’s current state and cost-effective insights on how to advance the program to the next level and avoid future problems.

2.    A strong majority of organizations have a senior executive accountable for the records program. 

The survey investigated another key principle of effective recordkeeping – accountability – which includes assigning a senior executive to oversee the records management program. A strong majority of respondents (75%) indicated that their organization has appointed a senior executive to oversee the program. Twenty-one percent of respondents said that their organization does not have a senior executive in charge of a records program. The latter organizations have higher-risk programs due to the likelihood that their programs are managed by individuals and/or departments (such as the IT department) that are not experts specifically in records management. For these organizations, focusing on improving accountability represents a significant opportunity.

3.    There are at least three solid opportunities for executives-in-charge of records management to improve their organization’s program.

While many companies claim to have appointed an executive to oversee the records program (75%), only 16 percent specified that the executive in charge manages program development and compliance monitoring. The same low number of respondents (16%) also indicated that the executive in charge helps ensure that compliance-related matters are resolved. These findings indicate that some executives in charge, by focusing more effectively on these two areas — compliance monitoring and compliance issue resolution — can significantly improve their records programs and reduce the organization’s risk. This focus can include a third area, making sure that the company’s records manual is periodically updated and that the records policies are regularly communicated to employees starting from the time they are hired.

The information management landscape is continually changing. An effective records management program is essential for enterprises to meet increasingly complex, demanding and evolving regulatory challenges. Many organizations recognize this and have implemented best practices to help ensure that their records programs are effective. On the other hand, these and other organizations have significant opportunities to make their program even stronger when it comes to reducing risk, continually improving processes over time and documenting the program’s value to the business.

Ken Neal is a certified enterprise content management practitioner (ecm^p) and director of corporate communications for Canon Business Process Services (www.cbps.canon.com), an international leader in managed services.