As a business, it’s important to destroy documents according to a retention schedule. There are specific regulations and rules that need to be followed in order to stay on the right side of the law. And keeping some documents for longer than needed can cause as many problems as not keeping those documents long enough.
Problems with Keeping Documents Too Long and Not Long Enough
When companies don’t follow a retention schedule, they may face legal charges. In the late 1990s, Arthur Anderson LLP was found guilty of faulty accounting practices. The prosecutor found employees trying to destroy documents that actually proved their guilt. The documents that finally implicated them did not need to be kept as long as they had been.
With a retention schedule, the charges may have been avoided. On the flip side, "not keeping documents long enough can result in legal issues as well." By following retention schedule guidelines, companies will know how long they should keep documents and when it is legally acceptable to destroy them.
Risks of Not Having a Retention Schedule
With the growing volume of retained business records comes risk. There’s a greater burden of identifying and locating records when needed for legal compliance. Irregularity or inconsistency in a business’s records program also exposes a company to unnecessary risk. The task of locating required documents can be huge. With a successful records retention schedule, businesses realize many benefits:
- Control of records volume
- Improved utilization of resources
- Demonstration of compliance with regulatory and statutory record keeping requirements
- Consistency of record keeping policies
- Easy location and retrieval of records when needed
- Reduced litigation risks
Structural Elements of a Retention Schedule
A retention schedule organizes a business’s records in categories known as record classes. There are groupings of records that support legal and operational retention requirements. By creating record classes, a company can apply consistent retention practices to like types of records. Each record class includes a description of the process and examples of the types of records which fall under a specific record class. The retention period can be outlined in months, years or even a contingency. It is accompanied by thorough legal research that documents legal considerations and requirements.
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A retention schedule policy should be seen as dynamic and reviewed periodically. It is recommended that is should be reviewed about every 18 to 24 months to evaluate the impact of legal changes. It should also be updated to reflect any company changes. A retention schedule needs to be indoctrinated in a business’s way of life. It should be packaged, rolled out, communicated often within the company and be implemented as an accessible part of the business’s infrastructure.
A records retention schedule is the cornerstone of an effective records management program for any company. It defines a company’s compliance and legal record keeping requirements while ensuring that records are kept as long as legally required and that non-needed records are disposed of in a controlled and systematic manner.
In the long run, an effective record retention policy will help avoid non-intended wrongdoing, which can save a lot time and problems should legal issues ever surface in the company or organization. The most effective way to stay in compliance with the law is to rigorously follow a strong records retention policy and shred documents when they are no longer legally needed. It’s important for just about any type of organization or industry to have a strong record retention policy, including healthcare, education and legal.
Contact Carolina Shred
From paper shredding and hard drive shredding to electronic device shredding, Carolina Shred offers secure destruction of confidential and proprietary information. An onsite audit of your current documents is also provided. Give us a call for prompt and safe document shredding and removal. We are equipped to handle all situations.