Tue, Jan 14, 2020
ByProtiviti KnowledgeLeader

Defined policies and procedures play an integral role in efficient and effective company operations. They are also key to the company’s internal control environment.

By definition, a “policy” is any rule or set of rules that requires or guides action. A policy should be designed to promote the conduct of authorized activities in an effective, efficient and economical manner and should provide a satisfactory degree of assurance that the resources of the company are suitably safeguarded. Also, any policy formulated should conform to applicable laws and regulations and should be consistent with the mission and philosophy of the company.

Procedures are the methods employed to carry out activities in conformity with prescribed policies. To promote maximum efficiency and economy, prescribed procedures should be as simple as possible and should not be overlapping, conflicting or duplicative.

All teams within a company that follow standardized procedures for operations related to specific policies established by the company should establish a formalized policy and practice. Any set of procedures that are followed for simple or informal processes and are unique to a division do not need to be formalized and may be documented for division use only.

All formalized policies and practices should be maintained by human resources. A leading practice is to develop a policy to create guidelines for the formulation, finalization and maintenance of the company’s formal policies and practices.

Steps in this policy might include:

1. The appropriate leadership representative will submit and formulate all proposed policies and practices for approval.

2. Any written policies and practices will follow the format prescribed within stating a purpose for the policy, the policy itself, the practices to be followed in order to carry out the policy, any definitions that might apply, and any possible responsibility specifics.

3. Each leadership representative will submit any proposed or revised policy(ies) to human resources for review, clarification and revision once a month, if necessary. Human resources will ensure that all required components are present.

4. Human resources will enter all proposed policies onto a policy and practice log upon receipt and review. An authorization page will be attached to the policy for approval purposes.

5. Any policy(ies) requiring revisions will be returned to the leadership representative for appropriate modification. The proposed policy(ies) will be forwarded back to human resources upon revision.

6. Human resources will forward the package of proposed policies to the legal department after a review by legal counsel. The proposed policies will be forwarded to senior leadership for review and approval.

7. If approved by senior leadership, the proposed policy(ies) will be presented to the board of directors for review and approval at their monthly meeting. If modifications or changes are made by either corporate counsel or senior leadership, the policy(ies) will be returned to human resources where they will be logged and returned to the appropriate leadership representative for the necessary modifications.

8. The proposed policy(ies) will be reviewed by the board and, if acceptable, finalized. Any unacceptable policy(ies) will be returned to human resources where they will be logged and returned to the appropriate leadership representative for the necessary modifications.

9. Finalized policy(ies) approved by the board will be returned to human resources for distribution to the leadership representative and all appropriate employees affected by the policy.

10. The original copy of the approved policy(ies) will be maintained permanently by human resources in a master file of all policies and practices.

11. With the approval and authorization of the board of directors, the president/CEO may modify, approve and reissue policies and practices to all employees if changes to the policy and practice are not considered material changes. Nonmaterial changes include procedural and process corrections, minor modifications to employee titles, and revisions to the attached forms.

12. Material changes must be submitted before the board of directors could include modification of the company’s policy statement, purpose and/or definitions.

KnowledgeLeader offers over 400 example policy and procedure templates to assist you with developing new documentation for your organization. Specific examples include the following: