IT Compliance Advisor

Jul 8 2013   6:51PM GMT

A records retention schedule helps assure efficiency and defensibility



Posted by: Ben Cole
Tags:
CIO

(This blog post was written by Marilyn Bier, chief executive officer for ARMA International.)

It’s tempting to hang on to every document and every email message we create and receive because we think there’s always a chance it will be needed again. It’s especially easy to retain electronic records because they don’t pile up on our desks or choke our cabinets; instead, they can be tucked away on a network server or in a hibernating e-mail account, out of sight and mind.

Meanwhile, we continue to generate electronic records at a staggering pace – and, in the process, we may be piling on more and more operational and legal risk.

The best safeguard is a sound information governance program that treats records as the strategic assets they really are. Such a program will help identify gaps in business processes, minimize legal and compliance risk, and potentially save enormous sums of money in discovery and litigation.

At the heart of an information governance program is the records retention schedule. ARMA International, the authority on information governance, defines a records retention schedule as “a comprehensive list of records series, indicating for each the length of time it is to be maintained and its disposition.”

How do you develop a retention schedule? There are many resources that provide detailed guidance. ARMA International recommends How to Develop a Retention Schedule, by John Montana, founder of records management consulting firm Montana & Associates; and Records Retention and Disposition, an online course that includes a copy of Montana’s book.

Generally, the process of developing a records retention schedule begins with categorizing records. Their worth is then defined against established criteria, such as how long a record has operational or legal value. Next, a time frame for maintaining the records is defined. Finally, the disposition of the records is determined, which entails some method of destruction or preservation for their historical value.

Because a records retention program touches every part of an organization, it provides operational, legal and regulatory benefits.

A consistently enforced retention program will help control the growth of your records. If you’ve ever had a hard time finding a document you’re sure is stashed on a server or flash drive somewhere, then imagine how difficult it would be to locate and analyze 880 million pages of information. That’s how much data the plaintiff requested in McNulty v. Reddy Ice Holdings Inc., a 2011 civil action in the United States. It may seem like an extraordinary example, but there are many cases of parties having requested millions of records in litigation.

So, clearly, keeping records that have outlived their use will clog the system, making it expensive to find those items that are urgently needed for a business purpose or to meet a discovery request. In a lawsuit, the searching parties may be paralegals, who typically charge $175 or more per hour, or lawyers, who are much more expensive.

Also, keep in mind that storing useless records is the equivalent of burning money. As IT budgets continue to tighten, system administrators are looking for ways to reduce their overall costs – and one tool at their disposal is a good retention program.

A good retention program also minimizes the organization’s exposure to the legal risks that may be associated with document retention and disposal. Retention and disposition are designed to occur regularly — in the normal course of business — rather than on an arbitrary basis. Thus, a retention schedule will demonstrate to courts and regulatory agencies that certain records were disposed of as scheduled, with no hidden motives for doing so.

Additionally, the retention schedule helps assure compliance with retention laws and regulations. Certain records must be kept for certain periods, while others must not be kept after certain periods. For example, a sound retention schedule will prevent an organization from retaining confidential medical or personnel records beyond their lifecycle, thereby eliminating their unnecessary risk of exposure.

There is one thing that trumps a retention schedule, and that’s a legal hold.

A legal hold is issued as a result of current or anticipated litigation, or audit, or investigation, or other matter that suspends the disposition of records. When a legal hold is in place, the affected records must not be destroyed or changed until the hold is lifted. Spoliation is the destruction of records that are held under a current legal hold. It can lead to severe fines, adverse publicity and even prison.

Organizations of all sizes and types are subject to laws that affect the records they create, how long they keep them and what they can do with them. A consistently enforced records retention program will demonstrate to the courts, regulators, boards and key stakeholders that the organization is fully leveraging its records for the purposes of operational efficiency and legal defensibility.

Marilyn Bier is chief executive officer of ARMA International, an authority on governing and managing information as critical business assets. As a not-for-profit professional association founded in 1955, it provides its 10,000+ global members and countless external customers the education, publications, and resources they need to be able to create, organize, secure, maintain, use, and dispose of information in ways that align with and contribute to their organization’s goals.

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