Guide: What is Policy Management?

Policies provide the guidelines that establish compliance expectations, shape operations and promote consistency. But how effectively do organization manage these policies? There’s much more to to policy management than writing the policies and distributing them across the organization.

You need strategic planning, careful coordination and ongoing oversight to get the most value out of your policies, especially as part of your governance, risk and compliance (GRC) program. For this reason, you want to understand what policy management is, why it’s important and how to approach it.

Table of Contents
What is Policy Management?
Why is Policy Management Important?
Policy Lifecycle Management
Best Practices for Managing Policies Throughout Their Lifecycle
Tools and Processes for Version Control and Change Management
Metrics and Reporting for Policy Management
Regulatory Compliance and Policy Management

What Is Policy Management?

Policy management is the process of creating, communicating, maintaining, and enforcing policies within your organization. Typically, policies guide how employees and stakeholders conduct themselves and make decisions within the scope of their responsibilities and roles. As such, policy and procedure management forms a critical part of:

• Compliance management
• Risk management
• Business governance
• IT governance

Why Is Policy Management Important?

Traditionally, the policy lifecycle followed this method: Policymakers write policies. They pass those policy documents down to managers. Managers pass them to departmental managers. Departmental managers pass them to employees. While some still follow this linear, checkbox system, modern policy lifecycle management is about blending best practices with innovation—crafting processes that are as dynamic as they are reliable. From drafting policies with innovative templates to ensuring compliance through automated alerts, it’s about crafting a seamless journey from inception to implementation and beyond.

If you don’t have a good policy management system, new policies or updates can get lost in the shuffle. It only takes one mistake, one incident or one error in judgment to damage an organization’s reputation and erode trust. The ultimate goal is to foster an environment where policies aren’t just documents collecting dust but living guides that evolve alongside your organization’s needs.

Policy Lifecycle Management

Given the high-stakes nature of some company policies, different stages of the policy lifecycle management help keep documents and attestations current.

1. Policy Creation

The first phase of a policy’s lifecycle management is creation or policy documentation. This stage involves the development of new policies or procedures. But how exactly do you create policies?

Step 1: Establish the Goal of the Policy

Start by identifying why you need a policy. Is it to ensure regulatory compliance, address employee confusion or standardize processes? Define the problem you want to address to establish a strong foundation for developing a relevant and effective policy.

Step 2: Gather Key Stakeholders’ Input

Once you’ve established the policy goals, gather input from key stakeholders: employees, the board of directors, clients and suppliers. Search for information about current working methods and practices to help you draft a policy that differentiates you from competitors and creates a unique branding narrative. During this stage, you’ll also want to define who implements and oversees the policy to provide accountability at all levels.

Step 3: Determine Policy Content

What’s in a given policy varies depending on your organization’s size, industry or location. However, most policies have similar content:

• Purpose statement: States the reason for the policy
• Scope: Defines who and what the policy applies to
• Policy statement: Articulates the rules or guidelines
• Responsibilities: Specify the roles and duties for compliance
• Procedures: Describes the steps for implementation and enforcement
• Glossary: Provides definitions for technical terms used in the policy

When crafting your business policies, be sure to use clear and easy-to-understand language. While you have the flexibility to tailor these policies to fit your specific needs, all policies should align with with all applicable laws to ensure compliance and protect your business. For instance, regulations like HIPAA come with explicit policy requirements to protect the privacy and security of medical information, ensuring that healthcare providers handle your data properly.

2. Policy Approval

Once you have created a policy, the next phase is seeking approval from the leadership team. Depending on the policy’s impact, these teams might involve executive management, legal and compliance departments, or even the board of directors. The leadership team serves as an adviser to policymakers and confirms policies meet expectations.

3. Policy Dissemination

After approval, you must communicate the policy to all stakeholders. Give the stakeholders background information as to why you are implementing a policy. Depending on the sensitivity and how easily your policy will be understood, you can communicate through emails, memos, employee training or meetings.

4. Policy Implementation

To effectively implement policies, it’s important to have the right tools, software or support systems in place. This helps ensure a smooth and successful process. Imagine your organization is rolling out a new data privacy policy to comply with updated regulations. To effectively implement this policy, you may need tools like a GRC software platform that helps track compliance activities and manage risk assessments.

A software tool like this can serve as the central hub where employees access the policy document, report any potential compliance issues and monitor progress through dashboards. You might also integrate automated alerts to notify relevant teams about upcoming deadlines or changes in regulation.

To further support implementation, offer training sessions that explain not just the “what” of the new policy but also the “why.” This could include interactive workshops or e-learning modules that engage employees in understanding data privacy’s importance and their role in maintaining it.

Supplemental materials such as quick reference guides or FAQs can be distributed for ongoing support. By aligning these tools and resources with your organization’s goals, you empower your team to navigate compliance confidently while fostering an innovative culture focused on continuous improvement.

5. Policy Monitoring

Regularly reviewing policies ensures they stay up-to-date and effective. When you implement a monitoring system that continuously tracks document versioning and evaluates stakeholder actions, you can ensure they meet regulatory standards. This usually involves using tools and automated processes for regular assessments, providing timely feedback and maintaining accountability and transparency through reporting. Monitoring policies often includes:

Regular Audits

Conduct periodic audits to assess compliance with the policies in place. You can review records and documentation or conduct spot checks to ensure validate adherence to policies.

Tracking System

You can use software to track compliance. Tools like compliance management systems can track actions, approvals and policy exceptions to help you monitor adherence.

Employee Feedback

Encourage employees to provide feedback or report issues related to the policy you have implemented. To collect feedback, try surveys, meetings or anonymous reporting tools. You’ll then use this feedback to gauge the relevance or effectiveness of policies and implement necessary updates.

Performance Metrics

Another way to monitor policy adherence is to define and monitor key performance metrics (KPIs) that align with your policy’s objectives. These metrics will help you assess whether your policies achieve the intended outcome and avoid potential risk.

6: Policy Review and Update

Based on the insights from your monitoring, review your policies regularly to ensure they remain compliant with federal and state laws while meeting your organization’s needs. In this stage, you might update policies to reflect changes in business practices, regulations or organization structure.

7. Policy Retirement

Over time, some policies lose relevance and might no longer be effective or applicable. When that happens, you should retire them. The need to retire a policy might be triggered by:

• A change in a related law or regulation
• An opportunity to reduce burden, save money or other management drive
• A determination that you no longer need a policy

As with the creation process, you should consult with stakeholders to confirm that retirement is appropriate. After it’s confirmed, remove the policy from your company policy library and archive a copy. You can then communicate the retirement of the policy to relevant stakeholders.

Update training material to reflect the changes and avoid confusion from outdated practices.

Best Practice for Managing Policies Throughout Their Lifecycle

Every business has different policy management processes. However, there are a few policy lifecycle management best practices you should consider.

Create a Policy Committee

Having a committee that handles the policy management lifecycle is helpful, especially if you’re a large organization undergoing significant shifts. A committee keeps your policies on schedule as experienced members understand the ins and outs of policy management and can handle all phases of the policies’ lifecycles. More importantly, the committee ensures policies align with your company’s goals and values.

The best practice is to create a committee that involves at least one stakeholder from each department. This approach build buy-in to your policy lifecycle management by including every segment of your organization in the process.

Monitor Changes

Regardless of how thorough your policy lifecycle management process is, external or internal factors will impact the relevance or compliance of your policies. It’s imperative you track:

• Regulatory updates: Changes in laws, regulations or industry standards may necessitate policy revisions .
• Organizational changes: Internal factors such as a new business process, company restructuring or leadership update can impact existing policies.
• Employee feedback: Employee feedback about how policies work in practice can highlight areas needing improvement or clarification.
• Incident analysis: Reviewing incidents of non-compliance audits or performance issues can identify gaps in current policies.

Make Your Policy Document a Single Source of Truth

When every stakeholder works off the same document, things often run smoother; there are fewer mistakes, miscommunications and occasions of accidental non-compliance. Plus, a single-source-of-truth document saves everyone time as people won’t have to look around for the most accurate, updated version. If you want to get the most out of your policies, ensure everyone knows where to find the latest version of your policies.

Tools and Processes for Version Control and Change Management

Effective version control and change management keep policies accurate, accessible and aligned with organizational goals. The ideal tool for these functions is policy management software, which offers features for version control (particularly an in-software editing tool), distribution and automated workflows.

The best policy management software has built-in audit trails, centralized dashboards and automated reminders for scheduled reviews. These capabilities reduce the manual effort required to track changes and ensure compliance.

Alternatively, you could use document management systems like Google Workspace or SharePoint for version control and change management. However, such a platform will require manual tracking of changes and additional administrative effort to ensure all stakeholders are working with the latest version of documents.

Metrics and Reporting for Policy Management

Ensuring compliance goes beyond merely implementing policies and procedures. It requires understanding your company’s performance on key metrics.

Key Performance Indicators (KPIs) for Policy Management

You can measure a wide range of metrics to gauge your policy performance, but here are the main ones to focus on:

• Policy acknowledgment rate: Tracks the percentage of stakeholders who have read and acknowledged a specific policy
• Training completion rate: Measures the percentage of employees who have completed training related to new or updated policies
• Incident reduction rate: Monitors the decrease in policy-related violations in a given period
• Audit compliance rate: Tracks the percentage of successful compliance checks during audits

Methods for Reporting Policy Compliance and Adherence

After you have picked the metrics to gauge the performance of your policy management, the next step is to select a clear and actionable report method that’s easy to share with stakeholders. If you’re using policy management software, you’ll have a real-time dashboard presenting the metrics you track.

If you’re using other methods, you might want to prepare a compliance report summarizing adherence levels, gaps in identified audits and incidents.

Data Analytics To Improve Policy Management Processes

Harnessing the insights gleaned from metrics and reports will help your organization enhance performance. For instance, data analytics can identify patterns in policy adherence, such as departments with higher non-compliance rates, for targeted intervention. You can also use the data to investigate the root cause of policy violations by uncovering underlying issues such as unclear policies or lack of training.

Using machine learning in your policy management process, you can anticipate potential policy compliance issues based on historical data and take proactive measures.

Regulatory Compliance and Policy Management

Good policy management ensures compliance with regulatory requirements. For example, you can mitigate NERC (North American Electric Reliability Corporation) compliance risks by creating, updating and enforcing policies that ensure the reliability and security of the bulk power system. For instance, you could develop a policy that mandates regular training for employees on cybersecurity best practices. This policy would align with NERC’s Critical Infrastructure Protection (CIP) standards, which are designed to safeguard critical cyber assets.

Monitoring regulatory changes and updating these policies regularly ensures they remain aligned with changes in regulations, standards, laws or emerging threats. By enforcing these updated policies through audits and assessments, your organization can better manage compliance risks while maintaining the integrity of its operations. In addition, proper policy management makes demonstrating compliance during audits and inspections easier.

Improving Policy Lifecycle Management

Well-made policies are more than documented rules. They form the basis of every business decision. So, instead of micromanaging policy enforcement, it’s ideal to integrate a centralized policy library and manage entire policy lifecycles from one dashboard.

Onspring’s policy management software allows you to move past redundant, manual procedures and transition to a streamlined, automated tool that simplifies policy management. You can seamlessly draft new policies, submit them to stakeholders, manage them, revise them and archive retired policies for reference. Request a demo today to see how our policy management software can inform your policy management processes.