Why Is It Important to Update Policies and Procedures?

Policies and procedures are the foundational documents that influence day-to-day business functions. They keep staff behavior, legal compliance, and internal governance consistent within the company. It’s important to understand that while these internal rulebooks support consistency, they still need to evolve over time. Legal, operational, and risk environments change—particularly for globally operating organizations—requiring relevant policy and procedural updates. 

Ascot provides global support for companies throughout maintaining and reviewing this vital documentation, rather than being limited to specific jurisdictions. We’ve created this article as a guide for enterprises and entrepreneurs seeking to better understand the importance of updating policies and procedures. With this knowledge and a commitment to policy integrity, companies can ensure they are fit for successful modern business operations.

The Role of Policies and Procedures in Business Operations

In essence, these documents create a solid and reliable operational framework. They provide structure, consistency, and legal clarity for all stakeholders, no matter their department or geographical location. They define everything from core processes to expected employee and executive conduct. As a result, these written procedures reduce ambiguity and protect the organization from legal consequences. Not to mention that the clarity and consistency evident in such protocols allows businesses to scale anywhere in the world without losing focus.

Importance of updating policies and procedures​

No matter how robust policies and procedures appear to be, they won’t remain effective if they fail to reflect current legislation or business norms. Taking the time to update policies regularly primarily ensures the company continues to act in line with regulatory changes and avoids legal issues. Furthermore, updating supports operational evolution, providing clear guidelines that support businesses in adapting to new technologies and business expansion with a strong framework for efficiency and ethical behavior.

In addition, reviews and updates help to maintain and reinforce the relevance of policies to staff teams and leadership. Not to mention that ensuring policy alignment with current staff and executives can prevent cultural disruptions and internal friction.

Finally, businesses will occasionally be subject to compliance auditing or investigations. Reviewing and updating policies and procedures can highlight areas of compliance risk in time for businesses to proactively make improvements prior to mandatory evaluations.

Risks of Outdated Policies

When businesses allow documentation to become outdated, they become vulnerable to a range of potential consequences. The most obvious of these risks is non-compliance with current laws or industry standards due to protocols no longer reflecting regulatory requirements. This can lead to fines and other sanctions.

Alongside official legislative non-compliance, outdated documentation can expose businesses to litigation or reputational damage. For instance, data breaches caused by policies that are no longer fit for purpose may prompt class-action lawsuits from affected consumers and damage wider trust.

There may also be internal consequences. Outdated policies may mean training, onboarding, or protocol enforcement may no longer be suitable, leading to operational disruptions and high turnover. Indeed, lack of relevance or clarity in protocol documents can influence confusion during times of crisis, preventing staff from responding with appropriate internal escalation and undermining the company’s recovery.

How Often Should Policies and Procedures Be Reviewed and Updated?

There’s no universal timeline for reviewing and updating protocols. However, general industry practice is to assess policies and procedures at least once every 12 months. The focus of these annual reviews is usually on the relevance of active operational policies. If there have been specific incidents or there are upcoming audits, these should also trigger policy and procedure evaluations to highlight outdated documents and address any gaps. Beyond these events, whenever any regulatory or legislative changes occur, businesses need to evaluate protocols to ensure they continue to be appropriate.

It’s important to note that while the above represents general industry practice, certain industries may require more frequent reviews and updates. For instance, organizations operating in finance or healthcare may be subject either to mandatory assessments or benefit from shorter review cycles that further minimize space for risk exposure.

Best Practices When You Update Policies and Procedures

When updating policies and procedures, it’s important to adopt a structured and consistent approach. Some of the key steps in this process include:

• Assign ownership of each policy to specific department heads or compliance officers. Maintain a centralized review calendar that notifies both these owners and executive leadership of scheduled assessments.
• Consult with experienced compliance consultants or subscribe to regulatory update databases. Regularly checking in with these resources help keep businesses on top of changes.
• When policies are changed or removed, record who made these adjustments and why. This helps with accountability and confirms relevance. Utilizing version control protocols and tracking systems also helps to ensure everyone is using the most recent draft of the protocols.
• Revised policies and procedures need to be immediately distributed to all key staff and relevant stakeholders. Importantly, companies need to confirm understanding and acknowledgement of these new protocols.
• Wherever needed, companies must provide follow-up training that reinforces practical understanding of changed processes. Additionally, open channels for workers to gain clarification can be useful.

Global Businesses Require Centralized Policy Management

Multinational businesses navigate additional policy management challenges, as they usually have to operate within multiple regulatory layers. These present not just differing legal standards, but also cultural and linguistic variances.

This is why a centralized but adaptable framework is recommended. Businesses should adopt a unified structure in which all documentation and policies are stored, updated, and monitored. From here, leaders can make localized document adjustments in line with specific jurisdictions or geographies.

In these systems, centralized oversight and version control processes are essential for ensuring overall consistency, accuracy, and accountability. It is also vital for documents to be available in multiple languages, enhancing clarity for workers no matter where in the world they operate.

The Role of Compliance Audits in Policy Updates

Compliance audits are effective influencers of corporate policy. They identify areas of weakness and outdated protocols or procedures. The auditing process involves thorough examinations of key operations, records, and protocols—resulting in detailed reports that flag areas of concern. This can then trigger policy revisions that help to close potential compliance gaps, mitigate risks, and make operations more resilient.

Whether audits are performed by internal teams or external bodies, they provide vital accountability. When teams know that documentation and processes will be regularly reviewed, this can encourage them to maintain compliant behavior and keep policies relevant.

Aligning Updates With Broader Compliance Frameworks

Policy updates shouldn’t be standalone tasks, but rather components of a wider compliance program. After all, they’re strategic actions that support and sometimes drive how legally and efficiently companies operate.

This means business leaders need to align their policy updates with other core company frameworks, such as internal controls, employee training programs, and legal protocols. For instance, when a new anti-bribery policy gets introduced, this should reflect the legal compliance standards of the jurisdiction, be integrated into training programs of employees it affects, and align with ethical monitoring practices.

Maintaining clear documentation on updates is also key to compliance. These items act as the baseline for enforcement and record-keeping during any legal disputes or investigations that might arise due to apparent breaches.

FAQs

Why is it important to update policies and procedures regularly?

Updates keep policies and procedures accurate, enforceable, and aligned with legal and operational compliance standards.

What happens if we don’t update our procedures?

Failure to update can lead to legal non-compliance alongside employee and operational confusion. The results of this include potential penalties and loss of trust during audits.

How often should policies and procedures be updated?

Policies should be reviewed annually for most businesses, or as soon as legal or operational changes arise.

Who should be responsible for reviewing policies?

Responsibility for policy reviews usually falls to department heads, extenal advisors, or appointed internal compliance officers.

Can updated policies help with compliance audits?

Yes, as up-to-date documentation supports transparency and mitigates negative findings during external reviews.

References

Yenouskas, J, et al. (2018, July). Emerging Legal Issues in Data Breach Class Actions. American Bar. https://www.americanbar.org/groups/business_law/resources/business-law-today/2018-july/emerging-legal-issues-in-data-breach-class-actions/

Government of Western Australia. (2024, January 17)). Version Control. Government of Western Australia. https://www.wa.gov.au/government/publications/version-control

Ishwardat, S, et al. (2024, October). Stimulating Regulatory Compliance and Ethical Behavior of Organizations: A Review. Research Gate. https://www.researchgate.net/publication/386088181_Stimulating_Regulatory_Compliance_and_Ethical_Behavior_of_Organizations_A_Review