What Is a Data Retention Policy & Why Is It Important?

 

A data retention policy, or a record retention policy, is a business’ established protocol for maintaining information. Typically, a data retention policy will define: For more at Data Retention Policy

What data needs to be retained

The format in which it should be kept

How long it should be stored for

Whether it should eventually be archived or deleted

Who has the authority to dispose of it, and

What procedure to follow in the event of a policy violation

 

Though the primary purpose of a data retention policy is to ensure proper data management in accordance with relevant legal statutes and regulations, it’s also an excellent way to enhance efficiency within your organization.Data retention, or record retention, is exactly what it sounds like — the practice of storing and managing data and records for a designated period of time. There are any number of reasons why a business might need to retain data: to maintain accurate financial records, to abide by local, state and federal laws, to comply with industry regulations, to ensure that information is easily accessible for eDiscovery and litigation purposes and so on. To fulfill these and other business requirements, it’s imperative that every organization develop and implement data retention policies.A data retention period refers to the amount of time that an organization holds onto information. Different data should have different retention periods. Best practice dictates that data should only be kept only as long as it’s useful. That said, certain laws and regulations have specific requirements regarding data retention periods, so it’s important to do your research before determining the retention period for a data retention policy.Relevant workpapers, as defined by Sec. 802(a)(2), include memoranda, correspondence, communications, electronic records and other documents, which are created, sent or received in connection to an audit or review. Any public company found in violation of SOX’s data retention requirements is subject to fines, imprisonment or both. For more at Data Retention Policy