Dreams are my reality: Key pointers for writing corporate policies

Blog post only

If you are ever tasked with writing a corporate policy, your instincts might lead you to include a lot of pointless narratives on how certain rules work and why policy is important. Or, if you understand a little bit better what the policy is intended to do, you might end up describing some idealised state of how things should work. But these instincts will inevitably lead you on the wrong path. Any policy is only as good as how often it’s followed. A policy that’s lengthy and difficult to understand will not be followed. A strong corporate policy (whether on taxes or on anything else) should follow a few key design principles.

Firstly, a written policy should be short, to the point and written with the most likely audience in mind. They should be able to consult the policy and quickly assess what to do and then follow it.

Secondly and perhaps most importantly, it should be achievable. In fact, it should probably describe what is already happening anyway. This might sound counterintuitive. If it’s already happening anyway, why would you need to write it down? But a person working in Risk explained it as follows: if you describe an unachievable idealised state, you’d be in breach the moment the policy is issued. Whatever is happening before the policy is probably working just fine for the vast majority of cases. Policy is put in place to give structure to the status quo, maintain quality and prevent lapses. 

Thirdly, any policy should fit into the larger set of corporate policies. This means using consistent terminology (is it even right to call your policy a ‘policy’?), explain how the policy fits into the larger whole and ensure the allocation of responsibility and how to address breaches fits into the organizational structure. For instance, tax matters are often the primary responsibility of the board of directors, which delegates this down to a head of tax, but who is still required to get approval and/or guidance from the board on very material issues (please define or explain what is very material). The head of tax usually delegates responsibility for taxes further, but if so, should set clear perimeters of that responsibility and create triggers that require consultation with the tax department. Curiously, I have seen corporate policies on taxes that ignore these points entirely.

So in short, if you write a corporate policy from an arm chair, it will not land and it will not stick. You’d get stuck in dreams. The policy needs to be embedded in the organisation. That way and that way only, dreams can be your reality (https://open.spotify.com/track/1gci2QBGH5nzPWePv6ATom?si=6d438342a7254167).

Obvious disclaimers: this is not advice. These views are my own and do not necessarily represent my employer.