Risky business.

If companies are not taking records management seriously today, they may be in for a rude awakening. Just ask any of the corporations--both American and international--whose principals have been investigated, fined, and jailed by the Securities and Exchange Commission as a result of their lax recordkeeping habits and/or mismanagement of company information.

Yet despite the well-publicized court cases, arrests, and large fines, many companies continue to be behind the curve when it comes to records management issues--especially electronic records management issues.

A recent survey by Cohasset Associates Inc. and sponsored by ARMA International and AIIM International, illustrates the risky situation in corporations today. The 2003 "Electronic Records Management Survey" reveals that nearly half of U.S. companies have not adopted records retention policies for e-mail and other electronic documents. Not only have companies failed to address both e-mail and electronic document retention, but also e-records policies are nonexistent in almost half of them. In addition, 47 percent of the more than 2,200 survey respondents said their organization does not include electronic records in its retention and destruction schedules. Even more disturbing, 46 percent of companies reported having no system for placing holds on records in the event of pending litigation or a regulatory investigation--leaving open the possibility that records critical to a legal matter could be destroyed.

Surprisingly, 41 percent of respondents stated that electronic records were not included in their organization's current records management program. Forty percent of respondents reported that their records management policies and procedures do not address electronic records. Fifty-nine percent of respondents indicated that their organization's e-mail records are not subject to any retention policy.

Organizations without an effective records management program in place potentially face major legal, compliance, and business risks. While the overwhelming number of respondents 85 percent--indicated that their organization currently has a formal records management program, 41 percent of records managers evaluated the effectiveness of their organization's records management program as either "marginal" (18 percent) or "fair" (23 percent), the two lowest categories in the survey's five-point semantic scale. With a total of 80 percent of respondents rating the effectiveness of their organization's current records management program in the lower three categories, much improvement is dearly needed.

This issue of The Information Management Journal highlights the importance of electronic record policies and compliance procedures in organizations' records management programs. In "Records Management & Compliance: Making the Connection," Randolph A. Kahn, Esq., says organizations must take a proactive and holistic approach to compliance that ensures the business, technological, and legal challenges of records management are addressed. Whether or not your organization is one of the 41 percent that regards its records management program as marginal or fair, records management plays a key role in compliance.

For more on the Cohasset/ARMA/ AIIM survey, read "E-Records Management: A Sad State of Affairs or a Golden Opportunity?" Cynthia Launchbaugh analyzes the survey results and examines what they mean to organizations everywhere.

If your organization is operating with a records management program or policies that leave much to be desired, it is taking a big gamble on its future. A solid, comprehensive records management program can be an effective insurance policy and business facilitator--but it must be taken seriously and be given the resources it needs to function properly.