Minimising non-compliance through records management

The post-dotcom bust has left corporate shareholders more militant, demanding and willing to fire non-performers than ever before.

Markets and customers are no longer in the mood to accept excuses and their reactions to mistakes and bad planning can carry disastrous consequences.

As unfortunate as it may be, the 21^st century CEO can no longer rely on a round of golf or a show and dinner to smooth over cracks. Dealing with the issues facing the company in the market, internally, as well as from a legislative perspective is a must for every executive.

The CEO`s concerns can be broken down into three issues: compliance, risk and cost. These issues affect all executives across the globe to varying degrees.

Corporate leaders need to be aware of all the issues relating to compliance if they expect to meet the demands of global partners.

Paul Mullon, divisional director of marketing, Metrofile

So much has been said about compliance recently that without an attorney, few people know what is required and what is not. Locally, we have many compliance recommendations in the form of King II and new legislation such as FICA. While some may think these are burdensome, they are quite liberal when compared to the compliance regulations in the US, such as Sarbanes-Oxley.

Corporate leaders need to be aware of all the issues relating to compliance if they expect to meet the demands of global partners.

Far from an additional set of processes to be added onto existing business procedures, compliance must be built into the company strategy to ensure the business meets all these requirements as part of its normal business routine.

The second issue is managing risk. There are the normal financial and market risks to consider, plus the new risks interlinked with compliance, which could require companies to produce proof of their actions when called for. For example, contracts and employment records must be kept for a minimum period during which the company is legally obliged to produce them when required.

These can affect the financial viability and reputation of the company in the long run and must therefore be included in corporate risk management strategies.

Of course, cost is also high on the CEO`s list of nightmares as the executive works to provide regular returns to shareholders. The cost of doing business, of seeking new business, developing new products and markets, bettering competitors and fulfilling other aspects of strategy, all impact on the bottom line. Linking to the points above, the costs of compliance efforts and managing company information now also play a part in financial thinking and increasingly, so do the even greater potential costs of non-compliance.

Although managing corporate documents and records is usually seen as a separate issue, this discipline has a direct impact on the three areas above. Records management policies should be integrated into corporate strategy to support compliance, risk and cost management processes.

Whether an internal team of skilled records management personnel is created, or the job is outsourced to an expert company, taking care of business records effectively can play an important role in turning the CEO`s nightmare into a dream job.

When integrating records and document management into business strategy, it is often in the best interest of the company to outsource these management processes to organisations skilled in best practices and methodologies.

An expert in records management will be able to implement the most efficient practices in any company to ensure corporate policies are designed in accordance with the law and the company`s own requirements.

In addition, outsourcing the task ensures the CEO only has to worry about those issues related to his company`s core business, leaving the paper and electronic records shuffling to companies that make it their core business.

Records management plays a definitive role for the CEO in each of these three issues. In the past it may have been neglected due to the lack of formality surrounding compliance and all the processes involved in making the grade, or it may have been because of a lack of knowledge.

The realities of business today, however, preclude any negligence when it comes to the issues of compliance, risk and cost. Corporate leaders lacking the prerequisite knowledge lack the ability to do their jobs properly and will continually have to deal with three overarching nightmares during their tenure. Others with a grasp on the benefits of efficient records management, on the other hand, will be able to enjoy the fruits of their dream job.