Q&A: Fundamentals of Effective Corporate Records Management

August 3, 2015

file folder and mouseThe broad subject of effectively managing corporate records covers ten topics (1) basics of corporate records management; (2) fundamentals of effective corporate records management; (3) establishing and maintaining a corporate records management program; (4) legal issues involved in a corporate records management program; (5) other issues involving corporate records; (6) considerations for computer files and electronic records; (7) auditing corporate records; (8) managing corporate information and knowledge; (9) developing and implementing a corporate records management practice; and (10) forms and exhibits relating to corporate records.

This post describes the fundamentals of effective corporate records management to lawyers who are just beginning to advise clients about what they need to understand about how to effectively managing their corporate records.

New Corporate Record Management (CRM) Lawyer:  What are the fundamental things a record management client should know about effectively managing their corporate records?

Ed Dietel: First, a comprehensive corporate record management program needs continual support and attention from the top corporate leadership for at least three fundamental reasons:

(1) corporate records are an important and often critical part of corporate memory – those records can answer questions about the corporation’s progress toward its future;

(2) those records can come to the defense of the corporation in claims or litigation brought against it; and

(3) can satisfy legal requirements imposed by various laws, especially those of the top public corporate leaders mandated by the Sarbanes-Oxley Act.

New Corporate Record Management (CRM) Lawyer: Do corporate records include “personal” materials produced by employees on company time?

Ed Dietel:  Corporate records policies should specify whether any materials produced by employees on company time fall outside the scope of qualifying for corporate records.  If there are no such exceptions, then all materials produced by employees while they are in duty for the firm should be classified as corporate records.  As discussed in the previous blog Q/As, the question of the retention period for such records should be determined by the Corporate Records Control Schedule (RCS).

New Corporate Record Management (CRM) Lawyer: What are the several things I should be thinking about when advising clients about managing their corporate records?

Ed Dietel:  There are several essentials to effective and efficient corporate records management program (CRMP):

(1) establishing a comprehensive program throughout the entire organization – no units or departments get to be exempted or given special or preferred treatment;

(2) give the CRMP professional status and recognition;

(3) develop a systematic, progressive, and continuous records audit and evaluation program that independently examines what is being done with corporate records;

(4) integrate corporate record management initiatives with corporate information handling technology improvements; and

(5) treat corporate data, information, and knowledge in its records as one of the most valuable corporate assets.

New Corporate Record Management (CRM) Lawyer: How can a corporate records management program contribute to the value of the firm?

Ed Dietel:  First to contribute value to the organization, the CRMP must be an integral part of the corporate objectives, meaning that the management of its records has to be taken into account when the firm is considering initiating new programs and processes.  For example, if a new technology is being considered for introduction into company operations, how will that new technology deal with and satisfy the data, information, and knowledge creation and preservation requirements for record keeping?

Second, how will the record keeping systems serve and satisfy customers?  To effectively answer this question, those responsible for corporate records must have an appreciation of what are the company’s objectives in serving its customers and potential customers?  Knowing the company’s customer satisfaction objectives, the record keepers can better determine how the qualities of the data, information, and knowledge in the records need to be evaluated.  The several quality characteristic that deserve evaluation were discussed in the previous blog posting.

Third, lawyers advising clients about managing their records, should understand how the records will contribute to corporate strategy, how those records will serve corporate management, and how they integrate into company business practices.  The answers to these questions depend on the company’s particular situation, its business philosophy, and its business environment.  Lawyers will need to work closely with the senior company managers to determine these answers so they can be integrated into company policy and its operating culture.

Fourth, and finally, lawyers need to determine, in conjunction with company managers, how best to motivate and inspire company employees to create, maintain, and preserve the data, information, and knowledge that needs to be incorporated into its records.  That data, information, and knowledge is lost forever if not recorded before an employee leaves the company for whatever reason.  Getting employees motivated and excited about recording what they know, but is only in their heads – that tacit information and knowledge – is a task easier said that actually done, particularly when an employee is drowning in operational or administrative work.  Dealing with the issue of tacit knowledge is a tremendous challenge for a lawyer advising corporate managers and will be examined in further detail in a subsequent blog post.