Policies and Procedures: First to be ignored, last to be updated

Policy and Procedure Update

Businesses around the world have traveled a long, winding, and often times bumpy path over the last decade. The global economic collapse and the ensuing recovery have made it necessary for companies to morph into new structures. The result has become organizations that are lean, dynamic, and more adaptable. However, a significant problem is beginning to reveal itself, the corporate policies and procedures are holdovers from a now extinct company.

All organizations have policies and procedures. Whether the policies and procedures are formal written documents or informal and unwritten they exist and guide daily decisions and help determine how stakeholders are treated. As organizations change, the policies and procedures must be adapted to meet the new business.

The problem with unwritten policies and procedures is that they are not subject to review and approval and all accountability is lost. Employees are left to their own devices to determine what defines quality and what the company deems important. While the absence of written policies and procedures empowers employees fulfill their job responsibilities, they take inconsistent approaches based on personal preference and which leads to organizational inconsistency and inefficiency.

Outdated policy and procedure manuals are worse than unwritten because they may actually point employees in the wrong direction. The employees that understand the policy and procedure is out of date will take it upon themselves to find a work around, which is the same as having an unwritten policy and procedure.

In either case, the business is inconsistent and inefficient.

The solution is obvious. Companies should update or create a policy and procedure that accurately represents the vision and goals of the current business. Well written policies and procedures increase organizational accountability and transparency and become fundamental to quality assurance and quality improvement programs. To be most effective the policy and procedure manual should be short and to the point, yet dynamic to allow for relevant changes.

When was the last time you took a critical look at your policies and procedures?

Policy and procedure manuals are often the last things to be modified when organizations go through a transformation. There are several reasons:

Policies and Procedures are difficult to write

Consideration needs to be given to how much detail to include and what the overall company policy really is, let alone what the standard procedure is that should be followed

Policies and Procedures are difficult to publish

Consideration should be given to how many and which executives to include in the review

Policies and Procedures are dynamic

As the legal environment, industry, and company structures and practices are constantly changing consideration should be given to what policies are needed and what procedures should be documented.

Policies and Procedures need an owner

Consideration should be given to who the administrative owner of the Policies and Procedures will be. The person will periodically assess the validity, draft updates, and communicate all changes to the Policies and Procedures.

Creating a comprehensive and customized policy and procedure manual is not as easy as it may seem, it is time consuming and requires an investment of resources. However, when done right a clearly understood set of policies and procedures establishes an overall tone at the top which enables employees to execute the vision and strategy of management in their daily activities. Plus policies and procedures are not simply used internally; Policies also communicate to stakeholders and third parties the vision of the company.

If you are uncertain when the last time you reviewed your policy and procedure manual or don’t know if you have one, now is the time to get started.


Veronika Fritz - Internal Audit ExecutiveThis blog post was written by Veronika Fritz. Veronika is a Managing Partner with Vonya Global, a premier provider of internal audit consulting services. Veronika is a CPA with over 18 years of audit and management experience. Her experience covers all areas of business including compliance, financial, operational and IT. She has led the planning, development and successful execution of financial audits, Sarbanes-Oxley Engagements, pre- and post-implementation ERP system reviews, and business process evaluations. Veronika has expert knowledge in evaluating the design, integrity, effectiveness and reliability of internal controls for financial reporting processes and Enterprise Resource Planning software. She has been a trusted advisor to companies spanning various industries. If you would like more information about Vonya Global or if you have a questions for Veronika, you may contact her through this blog, the company website, twitter, or her LinkedIn Profile.