Consequences of Poor Document Management
Imagine you have to retrieve legal documents from last year and are missing one key item. You search your office and computer and eventually find a copy in an old email account. Not only have you delayed your process, you’ve put your organization’s security at risk. Failing to protect your documents from the wrong hands violates compliance regulations and could put your board of directors and your organization in legal trouble. While poor document security is an evergreen problem, advances in software and new management practices can help you avoid critical failures.
We at Board Management want to make sure you that you know exactly what problems your board of directors could face–beyond the simple stress of disorganization–so we’ve compiled a list of consequences for poor document management below.
Security Breaches
If you do not organize and file your documents correctly, or invest in the wrong kind of software, your documents could be at risk of both physical and digital security breaches. Make sure that you label sensitive documents in a discreet manner and separate them carefully from other items. Keep backups, but make sure that they are stored in a safe location and tracked well. If you fail to protect your documents, your organization could face anything from legal complications to revenue losses.
Compliance Issues
Compliance regulations outlined in the Sarbanes-Oxley Act and HIPAA (if you are in the health industry), require that sensitive information and documentation is secure and accessible. Even if you don’t suffer from a security breach, fail to follow proper regulations and track your information carefully may put you in a tricky situation.
Loss of Credibility
If you are not able to provide documentation for your organization’s management or shareholders because you have lost it, you may lose credibility and trust. A worst-case scenario would be the loss of your position, but even a minor loss of respect can erode your relationship with your shareholders. In contrast, if you have your documents stored safely on a cloud-based system, you can share them with appropriate shareholders immediately upon request and increase your credibility.
Multiple Versions
If you do not have a centralized hub for final versions of your documents, you risk losing track of revisions. There is nothing worse than sending out an old version of a document to your board members just before an important meeting. Even an outdated agenda may cause you to miss an important issue for a timely vote. It’s helpful to keep “archive folders” for old versions, communicate with your group about updates, and avoid sending documents in progress via email. Share links or mention updates instead.
Physical Damage
The nightmare scenario of an office burning down is possible. Physical documents can physically be lost or destroyed in various ways (even a coffee stain can be devastating to something you need to circulate to shareholders). While it is advisable to have a physical copy of important documents as a backup, do not use this as your primary storage system.
Productivity and Collaboration Issues
Obviously scouring for documents takes up valuable time, but it also can delay key processes or hold up projects. Even when you find the documents in question, you may forget to send it to all the individuals who need it. If you keep updated versions of all documents in a cloud storage system you can share it immediately and won’t have to hunt.
Problems with Accessibility
Having a cloud-based system allows you and your fellow board members to access the documents from anywhere. If you keep documents in physical files, on self-hosted databases, or in select personal email accounts and local folders, you’ll be out of luck as soon as you step away. Because your board members do not all work in the same office, without cloud-hosting, you will be forced to select someone to be the receiver of all updates and track all documents. Instead, allow all directors to share documents and updates with your cloud-based system.
Final Takeaway
It’s important that you have backups for all key documents. While multiple backups are an explicit feature of cloud storage systems, you will also want to have a backup method that you directly control. This could be a printed copy, a saved copy on a special hard drive, or a copy that you file in the form of an email. But remember that none of these methods are sufficient for the kind of accessibility and security that you need in a rapidly changing digital age. Putting in the initial effort of switching to a cloud-based system will protect you and transform your workflow. Even if you keep old documents in the old system and start from this point forward, you, your fellow directors, and your organization will thank you.
To start the process of improving your board of directors’ document management, sign up for a free trial of Board Management software here.