IMPROVING CORPORATE PERFORMANCE.

• Author: DIETEL, J. EDWIN

THROUGH RECORDS AUDIT

AT THE CORE

THIS ARTICLE DISCUSSES

* Why every organization should periodically audit its recordkeeping practices

* How the role of management in corporate recordkeeping has changed

* Step-by-step procedures for conducting an audit of a recordkeeping unit

Many in the corporate sector think of corporate records as a major liability just waiting to erupt. Tobacco litigation in the United States is one significant (and negative) example. At the same time, corporate records represent a valuable competitive advantage when created and used properly.

Corporate executives and managers can systematically examine and evaluate their corporate records practices in order to make their records an asset to the corporate purpose rather than a liability. In the same way that an evaluation of corporate financial standing is determined through a financial audit, every organization should periodically audit its recordkeeping policies, procedures, and practices.

While statutes and regulations may offer more detailed definitions, corporate records in the simplest form are those materials in which information likely to be needed in the future is recorded. The problem is less about how records are defined and more about how they are organized and maintained for effective use by corporate employees and others needing the information. Corporate recordkeeping practices have the greatest likelihood of being improved when managers and other employees have before them a comprehensive evaluation of the current state of practice.

Corporate recordkeeping has been an arcane -- and often dreaded -- subject in the past. Executives and managers had others who took care of these "details" for them. These people were often hired as clerks and given the responsibility of following age-old policies and procedures for filing and storing paper records from a variety of sources. They were not hired to think, plan, or evaluate but instead, to do the established routine and to remain in the back rooms while doing it.

Many current liabilities may be the result of this rather cavalier inattention. Through corporate downsizing, many of these support personnel no longer exist. In today's knowledge age, everyone is (or at least should be) generating more information and knowledge than ever before. Much of that information resource in corporate records needs to be preserved as institutional memory.

How an organization manages its records (and the information and knowledge they contain) may be oriented toward one of two flawed extremes: throw records away as quickly as possible or preserve everything forever. Neither extreme is sound. Throwing records away as soon as possible ignores the fact that people do not stay in the organization forever. Records continue to serve as the corporate memory in addition to what staff members retain in their heads. Keeping everything forever creates a haystack problem: there is no discrimination as to which information is likely to be valuable in the future. What is not useful becomes a significant impediment to finding later what is needed at the moment.

A corporate records audit should provide an evaluation of where the company stands with its records policies, procedures, and practices. The audit should also point to what needs improvement and what plans are needed to achieve those improvements. Developing and implementing an effective records audit program is a significant challenge for both corporate management and the records manager. It involves such a wide-ranging set of skills that few are up to the entire task. In fact, the audit is one of the aspects of the field that makes it both interesting and challenging.

Before examining the recordkeeping practices and how they might be improved, thought needs to be given to the quality of the information and knowledge that records should contain. The quality of an organization's records, whatever the media, will never be any better than the quality of the information they record. Thus, the ultimate judgment about the quality of an organization's records and information management program involves a judgment about the quality of the information those records contain. How many information managers are up to making that ultimate judgment? More appropriately, how many are willing, at least, to try?

Qualities of Information Contained in Records

Information in corporate records needs to satisfy at least 10 essential quality criteria. The information should be

* accurate

* complete

* timely

* appropriate for retention

* relevant

* adequate

* credible

* engaging

* readily accessible

* likely to be needed in the future

Accuracy of Recorded Information

Inaccurate information in corporate records is misleading and may be the basis for significant legal liability. It is better to have no records at all than records that are inaccurate. Inaccurate records are, at some point, going to cause actions to be taken that are incorrectly focused or pointed in a wrong direction.

Accuracy refers to a lack of simple errors in transcription, collection, or aggregation. The information in this sense is either right or wrong. Yet accuracy is also affected by how finely or grossly it is measured; that is, how much of the information stays at a high or abstract level or gets into the fine details of the subject matter involved? Perceptions about accuracy are important, for if the person who receives the information does not trust the source, then the data has questionable accuracy. Reliability and credibility matter. Many managers have found that they must develop and build multiple information channels or sources to corroborate and build trust in the information they collect and use.

The corporate information staff can improve the accuracy of the information they provide by 1) finding out from users what sources they value and trust, 2) regularly assessing the accuracy of key sources, and 3) instituting a data-quality program for key transactions.

Completeness of Recorded...