Most organizations fail to manage the lifecycle of policies. This results in policies that are out of date, ineffective, and not aligned to business needs. It further opens the doors of liability as an organization may be held accountable for the policies it has in place but are not appropriate or is not compliant with.
Effective policy management starts with a lifecycle approach to managing policies. This is the process of managing and maintaining policies throughout their effective use within the organization. This lifecycle is defined in three primary phases:
Each of these primary phases has several sub-phases.
1 – Creation. The lifecycle of policy management starts with the Creation phase, which includes the following sub-phases:
- Need. It is at this beginning that the need for a policy is determined. It may be a regulatory requirement, values/ethics of the corporation, business partner requirement, best/industry practice, awareness of potential liability, or a host of other reasons that brings the organization to the point of determining that a new policy needs to be established. An organization needs an active risk and regulatory intelligence process to identify when a policy needs to be created.
- Ownership. The next step in the Creation phase is to assign a policy owner. Every policy in the organization should have an individual or business role that is the owner of the policy. Even if the policy is applied across the entire organization, such as with Code of Conduct, it is necessary that someone be established as the owner of the policy to oversee its implementation and monitoring within the environment.
- Writing. Once an owner is established the next part of the Creation phase is writing the policy. The policy should be written in a consistent style, format, and language as all other policies in the organization. Policies are to be clear and easily understood by the intended audience.
- Approval. Once the initial draft of the policy is written, it moves into the approval process of the Creation phase. The owner sends the draft policy over to identified stakeholders needed to approve the policy before going to publication. Some stakeholders may be in the approval stage for every policy written (e.g., human resources, legal). Other stakeholders are approvers because the subject matter touches on their area of the business and they are needed as a subject matter/process expert.
The Creation phase is iterative as the approvers may send back the policy requiring changes before it is approved and everyone comes to agreement that it is the right policy for the corporation.
2 – Communication. After the Creation phase comes the Communication phase. Communication involves the sub-phases of:
- Publication. After approval, the policy then needs to be published. Publication can be in printed policy manuals or on Intranet sites. Unfortunately, many organizations have scattered systems to publish policies and procedures without a single authoritative source. This often complicates the management of policies. Multiple publication places adds to the number of policies that become out of date. Best practice is to have a single policy publication engine in which any individual within the environment can login and see all of the policies that apply to his/her specific job role in the organization.
- Training. We live in the day of YouTube. It is no longer good enough to have just published a policy. Organizations have to actively show that individuals understand the policy and what is required of them. This requires that certain policies have associated training in either online or classroom formats to validate they understand the policy(s). Surveys and testing is an integral part of training to validate that individuals understand policies.
- Attestation. Once an individual has read a policy, and taken any associated training, it is next necessary to track their attestation to the policy – that they will adhere to it. Some policies such as Code of Conduct by their nature require specific attestation to on a regular basis (e.g., annual). Other policies may be grouped together in an attestation. While some policies it may be determined do not need specific attestation.
3 – Management. After a policy is communicated it enters the ongoing management phase. The management phase of the policy lifecycle contains:
- Enforcement. The policy is monitored for compliance within the organization. Specific controls that the policy authorizes are established and monitored to determine if the policy is being complied with. Incidents of non-compliance and policy violation are noted to provide feedback when the policy is next reviewed.
- Exception management. While policies are to be complied with there are instances that arise in which the organization accepts non-compliance. These exceptions have to be documented and managed. An exception is granted for a specific time period and is to be reviewed to validate that the exception is still needed.
4 – Maintenance. The final phase of the policy lifecycle is maintenance. The maintenance phase includes:
- Review. Every policy is to have a regular review cycle. The review of a policy should be done at least annually. It is during the review process that the policy owner looks at the incidents of non-compliance and exceptions granted alongside of the business requirements driving the policy. It is in this process that the policy is either authorized as is for another management cycle, goes back into the creation phase to update and approve the policy, or is archived for retention. The updated policy then moves into the communication phase.
- Archival. Every policy, and version of a policy, is to be archived for referral at a later point in time. When an organization becomes aware of an incident or a regulator has a question it is necessary to have a full view into the history of a policy – the owner, who read it, who was trained, who attested and on what version of the policy.
This provides a quick summary view of the policy lifecycle. Over the next several weeks we will dive into specific portions of the lifecycle, including:
- What is the right number of policies?
- Establishing policy ownership and accountability
- Providing consistency in policies through consistent style and language
- Communicating policies across extended business relationships
- Tracking policies attestation and delivering effective training
- Managing policy incidents and exceptions
- Monitoring metrics to establish effectiveness and/or issues with policies
- Relating policy management to risk, issue/case, and other GRC areas
- Using technology to manage and communicate policies
Previous blogs on this topic are:
- Corporate Policies in
Disarray and Chaos
- Policies, Done Right, Articulate Culture
- Defining a policy management lifecycle
In addition to this series on policy management, Corporate Integrity is also offering a full-day workshop on the topic of Effective Policy Management and Communication.