The Importance of Policy Management

Michael Nyhuis

Your organizational policies sit at the heart of your operations, highlighting the importance of policy management. Their scope both reflects your business's goals and priorities, and underpins your values.

Your policies provide the framework your operations need, and a structure on which you can build governance, risk and compliance programs.

Setting policies, though, is not enough to ensure that best practices are adopted ' unfortunately, life's not that simple! Having a handbook of carefully-crafted procedures is only the first step. Policy management demands the ongoing review and monitoring of the policies you set.

Here, we look at why policy management is so important, what it entails, and how organizations can ensure the effective management of their policies.

What Is the Definition of Policy Management?

The importance of policy management lies in its definition: rather than being a one-off event, it is a continuous managing process that requires regular adjustments to accommodate new technologies, updated legislation and advances in best practice. Setting your policies and procedures is the necessary first step.

But as we noted above, creating policies is not the be-all-and-end-all of policy management. Putting them in place and communicating them across the organization is equally important.

What lies at the heart of effective policy management is making sure that the policies you have worked hard on are adopted. The most perfectly-designed policies are nothing more than words on paper if they are not implemented and acted upon. Enforcing their take-up and ongoing compliance is the real nucleus of policy management; the key stage that will take your policies from aspirational to in-built.

Why Is Policy Management So Important?

Although effective policy management might seem like a no-brainer, the many conflicting priorities faced by business leaders can see it fall to the bottom of an extensive list.

The risks of not managing your policies effectively should provide sufficient incentive to prioritize and recognise the importance of policy management, though. There's the risk of health and safety breaches. The potential for regulatory fines. The reputational damage that results from publicity around legislative breaches. The possibility of lawsuits.

Writing a policy handbook is not enough — and neither is a one-off communication of policy and procedure. Good policy management demands the buy-in and understanding of your policies (perhaps through having your people on the ground input to them). It might mean training and testing the teams responsible for implementing the policies to ensure they fully appreciate what they need to do.

What is Effective Policy Management?

Whatever your policy management style is, consider the following best practices when creating your policies:
  • Drafting in experts to provide specialist knowledge. If you're creating HR policies, consider an HR consultant. If your focus is on health and safety, an expert in that field can add a layer of vigilance to your approach.
  • Your compliance team will be vital internal allies. They will have knowledge of the national legislation and industry regulations you need to comply with, as well as an understanding of best practice you should aspire to follow.
When communicating your policies, think about:
  • How you will make sure everyone is aware of the processes they need to follow. Any manual needs to be comprehensive, clear and easily navigable.
  • The channels you will use. Email and paper-based manuals have been the traditional approaches. But today, many organizations are recognizing the benefits of using compliance software to host, give access to, monitor and enforce their policies.
  • Distribution is also a consideration. How will you ensure everyone has access to a copy of your policies? Ignorance is no excuse for non-compliance; everyone needs to be made aware of the rules they have to follow. Again, this is an area where digital policy management can help ' particularly in these days of remote working, a cupboard full of paper documents and hard-copy manuals is less than ideal. Giving employees online access to policies, regardless of location, is vital ' not to mention better for the environment and more easily enforceable ' more of which below...
When enforcing your policies, remember:
  1. Communicating your policies isn't just a one-way process. Employees need to sign off on them, so you have a compliance audit-ready record of your policy management approach, allowing you to easily measure compliance. Enabling them to digitally sign avoids a paper mountain and facilitates best practice digital asset management.
  2. Automation can also help to mandate compliant approaches, by making it clear what each policy is and who is responsible, and allowing you to evidence employee knowledge of the policies they should follow.
  3. Digital policy management also enables you to flag specific policies ' perhaps where regulations and procedures have changed ' therefore making it quicker and easier for all employees to sign off only on updated policies, or those relevant to them.
A continuous loop:
  • Of course, because legislation and best practice are constantly changing, keeping your policies up to date is essential. Managing them digitally makes it easier for your internal teams to collaborate on updates and ensure that all documents remain current, in line with evolving regulations or internal standards.
  • And once the documents are updated, they need communicating again, signing again, and you need to continuously measure compliance with them. Effective policy management is a continuous process, rather than a one-off or once-every-few years event.

Reinforcing the Importance of Policy Management

When it comes to governance, risk and compliance, a robust approach to policy management is the foundation on which your success is built. Whether you're defining, ratifying, communicating or enforcing your procedures, you need to deliver best practice in policy management.

Not only this, but when it comes to compliance reporting and auditing, a well-run policy management approach ensures you can easily access and share the data you need to evidence a conscientious and thorough approach to regulatory compliance.

Digitalizing policy management can simplify, speed-up and strengthen your strategy, making it easier to create, communicate, enforce and update the policies that underpin your business operations. Read more about the legal, compliance and software tools Diligent offers that can support your digital policy management.

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Michael Nyhuis
Michael Nyhuis is the former Director of Audit & Compliance at Diligent and a modern governance expert with over 25 years of experience.