Question: Every year we load up our board meeting with policy reviews. And every year, we get complaints from the board and management about how time- consuming this process is. Is there any way to review policies less often?
Answer: Only a few laws actually contain requirements for annual policy review. Clearly, the board must review and reconsider these policies as required by law. To do otherwise is choosing to be in violation. That's not a good idea.
For the other policies, which is most of them, the decision about when and what to review has more flexibility - at least in theory. But, choosing not to review a policy on a regular or annual basis basically amounts to a decision not to manage carefully. So when the board asks to have their policy review lightened, the board is asking to have less responsibility. This is not a good idea either.
What is the right answer? The answer is balance. First, don't overload your policies with detail. Policies should be just that: policies and not procedures.
Second, policies on related topics can be combined. For example, you don't need separate policies for ECOA and for Fair Housing. All fair lending and non-discrimination issues can be dealt with in a single policy. Other topics can also be combined. Deposit regulations make a logical grouping.Finally, schedule policy review carefully. Time policy reviews so that the board isn't overwhelmed. In doing this, it can be a good idea to group policies by topic so that you have an opportunity to bring related issues to the board in an efficient way.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 14, 12/04
First published on 12/01/2004