Inside Experts: Corporate Policy Checklist

Six questions in-house counsel should consider when introducing a new corporate policy.

Back in the dark ages of the 1980s and early 1990s— think Gordon Gekko, Yuppies and MS-DOS—being an employee was a fairly straightforward affair. When you were hired, you got an employee manual in a plastic binder. The manual was written in a technical style, stating in clear, easy-to-follow language what to do and what not to do on the job. The policies in the manual were common sense: Be in the office by 9 a.m. Don’t report to work if you’re sick. Don’t drink or do drugs on the job. Don’t discriminate. Don’t leave paperwork marked “confidential” lying around at home (there was no such thing as the Internet or laptops). 

Employment, like life, was simpler in those days. Life and work have now become almost inseparable. And our jobs have become inundated with policies.

In my two tours as a general counsel for small IT services companies, I wrote the company employee manual because there was no one else to do it. In larger companies, the human resources department usually administers company policies. But often the law department is involved. 

Strictly speaking, the remit of law departments is to ensure that corporate policies don’t modify the employment-at-will relationship, don’t conflict with other laws or rights, and that all compliances are up to date. With the emergence of “corporate social responsibility” and “corporate citizenship” in recent years, policies in companies are now reaching beyond the boundaries of the employment relationship and company charters. I don’t think any conscientious person has a quarrel with their company committing its resources to making the world a better place. Issues of fairness and sound business arise, though, when corporate citizenship is put into action through policies aimed at the workforce. How should in-house lawyers respond?

A corporate communications policy is an example of well-known, universally adopted corporate policy that can be found in most employee manuals (no longer in plastic binders but posted on the company intranet). Corporate communications policies tell employees to do things like find communications styles and methods that work best with other employees and to immediately report health and safety hazards, and not to do things such as making threatening statements in e-mails. That good communications within a company minimizes risks and creates shareholder value is obvious. Communication is intrinsic to any job. And practicing good communication can readily be demonstrated and measured by management.

Now let’s consider a hypothetical press release from a CEO announcing that her company has committed itself to sustainability and that, going forward, “sustainability will be promoted at all levels on a companywide basis.”

What does sustainability mean? More specifically, what does sustainability mean for the company? One widely recognized definition calls sustainability “using methods, systems and materials that won't deplete resources or harm natural cycles.” “Sounds great. My kids talk about sustainability in school all the time,” says an employee. “But what does it have to do with my job or the future of the company?”  Without defining what sustainability means for the company, and without communicating a definition and objectives for company sustainability to employees, the announcement of a commitment to sustainability will never amount to anything more than a press release.  

Besides a definition and objectives, requirements for following the new sustainability policy within the context of working at the company need to be articulated. What promoting sustainability looks like in a corporate real estate department (e.g., lease solar-powered offices) is different than what it looks like in a sales administration organization (e.g., use web conferencing). 

Promoting sustainability on the job must also be measurable using metrics. Otherwise, how can anyone know if the policy is successfully being implemented, and how can an individual employee’s commitment to the new policy be fairly judged?

Finally, the new sustainability policy needs to create shareholder value, not just humanistic value but financial return on investment. Whether it is a future tax break or qualification for bid opportunities, there needs to be ROI.

When companies propose any new policy to be made part of their operations and business strategy, I think in-house lawyers should engage executive management and vet the policy initiative by following a checklist similar to the following:

  • Does the policy create shareholder value for the company? The Dow Jones Sustainability Indexes define sustainability as “…  a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.”
  • Have objectives been articulated for the policy? Do the objectives make sense within the company’s business?
  • Is the policy based on existing laws and regulations? Is it based on accepted industry standards?
  • Can the policy be expressed in clear, actionable job requirements?
  • Can performing the policy on the job be measured?
  • Does the policy create potential risks including wrongful termination claims?

I’m quite certain that my view of corporate social responsibility differs from that of younger Gen-X lawyers and Millennial generation lawyers. I think younger lawyers look at employment as a kind of membership in a community—the company—that is in turn part of a larger, global community. I still look at employment as a legal and business relationship and a source of livelihood. Fundamental to that relationship is the need to define responsibilities and set out criteria for determining success, from how to dress to how to promote sustainability. Before we in-house lawyers are stewards of the planet or agents of social change, we are lawyers. It is our job to see to it that social responsibility in companies is carried out in a fair, rational way.

Eric Esperne is counsel for Dell Healthcare & Life Sciences and is located in Canton, Mass. He has more than 15 years experience as in-house counsel for government, commercial and international providers of professional services, information technology and cloud computing.

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