Records Management is like insurance—the benefits are not realized fully until you need to file a claim, or in the case of RM, retrieve information. And when it comes to retrieving information, it’s important to consider three situations when sound policies and procedures can make a critical difference. All three involve vital records, which is any record in any format containing information that would be necessary in order to:
- Recreate the organization’s legal and financial position.
- Preserve the claims and rights of the organization and its stakeholders.
- Meet operational responsibilities under emergency or disaster conditions.
Vital records typically make up less than ten percent of the volume of records for most organizations, although for legal, medical, financial and governmental institutions it could be higher. Yet this small portion holds a great deal of value and importance.
1. Vital Records for Business Continuity / Disaster Recovery
Preservation of vital records is a pillar of any Business Continuity/Disaster Recovery plan, making BC/DR plans inextricably linked to Records Management policies.
Vital records for business continuity and recovery from a disaster might include:
- Contracts and agreements
- Operational records such as current accounting and personnel data
- Key account information for both customers and suppliers
- Standard operating procedures (SOPs)
- Current reports and summaries
- Software source codes
It’s important to inventory your vital records and determine specific risks for all of them, from weather to fire to human-inflicted threats, and identify ways to prevent them from happening. And of course, vital record management procedures require a plan of action in the event that disaster does strike. Extreme caution should be used when dealing with any damaged records, physical or electronic, as improper handling could lead to further, permanent loss.
Read more about LAC Group archive recovery support for Tulane University after Hurricane Katrina.
2. Vital records to support due diligence for mergers, acquisitions or investments
If your business is ever a candidate for merger or acquisition by another business, you will facilitate the process with a solid records management policy. Besides M&A activity, due diligence also applies to public offerings, joint ventures or investments such as private equity or venture capital.
Expected synergies and anticipated revenue require verification, which requires access to records. Savvy investors are combing public records to uncover potential vulnerabilities. As part of a prospective transaction, you need to provide access to records that could help alleviate concerns and demonstrate your value, such as:
- Financial and operating histories
- Verification of non-financial representations
- Records of litigation, disputes and investigation
- Evidence that assets are not misrepresented or overstated
- Records of intellectual property and R&D activity
Sound Records Management procedures alone will be viewed as an asset. And the ability to answer questions with the backup support of recorded data will help prevent an unwanted result like the investor wanting to restructure or re-price the deal, or even walk away.
3. Vital records for audits, litigation or other investigations
Regulatory compliance is probably the chief raison d’être of Records Management. No organization wants a visit from the IRS, state or local government, a law firm representing an aggrieved party or anyone else with the legal standing to request information. Having a solid records management program won’t help if you have the wrong answers, but it certainly will facilitate the process and alleviate stress for law- and regulation-abiding organizations.
The records management practices that are needed to respond to audits, litigation and other discovery activity include the ability to organize, scan, code and deliver the information needed with a strong chain-of-custody. In some instances, such as possible litigation, you also must consider what records could be relevant. In this era of e-Discovery, that could include sources as diverse as e-mail, internet history, text messages, video surveillance footage and system log-on/log-off data.
Recognizing the Value of Vital Records
A Records Management program ensures the availability of full, accurate records of activities and decisions within an organization. It covers all formats and includes both in-house and off-site information, for as long as needed based on retention schedules for legal, financial and administrative reasons. It provides for logical classification and easy retrieval facilitated by the use of metadata and the implementation of information standards and best practices.
LAC Group provides a wide range of Records Management services to all kinds of organizations. Based on our diverse experiences, I can tell you that without a solid policy for handling vital records, your organization is exposed to added levels of risk when dealing with records-related issues.
Please contact us with your questions on vital records, retention schedules or any other records management concerns.