The Critical Role of Policies, Procedures, and Governance

Policies and procedures are essential for establishing a robust governance framework in any business. When it comes to handling sensitive client data, they provide internal guidance for employees on processing such information and offer external assurance to clients about data handling practices. Before delving deeper, let’s clarify what we mean by sensitive information, policies, and procedures.

Sensitive Information

According to Article 4(13), (14), (15), Article 9, and Recitals (51) to (56) of the GDPR, sensitive information includes:

• Personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs

• Trade-union membership

• Genetic data and biometric data processed solely to identify a human being

• Health-related data

• Data concerning a person’s sex life or sexual orientation

Policies & Procedures

Policies are general rules or guidelines that standardise an organisation’s way of working—they are effectively ‘Corporate Laws’. Well-constructed policies usually align with local governing laws and are written in compliance with regulations. Policies help shape how employees work and set the company’s culture for processes, situations, groups of people, or particular environments.

Procedures are documented steps outlining processes for specific tasks within the business. They create best practices and are implemented to reduce errors and minimise the impact on business operations. Simple enough.

The Role of Policies & Procedures

Policies and procedures work hand in hand to set the compliance tone of an organisation. In relation to sensitive information, they assist in:

• Reducing damage from the loss of commercial data

• Boosting client trust

• Building a resilient governance framework

• Enhancing employee accountability

• Minimising insider threats

Anything of intrinsic value requires clear rules for maintenance and protection, and the same applies to sensitive data. Many organisations consider sensitive client information as one of their most important assets. In 2023, the National Cyber Security Centre estimated that approximately 75% of UK law firms had been targeted by cyber-attacks, emphasising the considerable risk involved in managing sensitive client information. Such attacks can lead to significant financial losses and extend beyond immediate monetary damage, affecting client trust and the firm’s reputation. In some cases, these breaches have resulted in millions of pounds being stolen and disruptions to daily operations.

When handling sensitive data, policies and procedures provide guidelines for employees on how to manage such information. Firstly, they create obligations aligned with relevant laws and regulations that the business and its employees must adhere to. These obligations are often documented in the employee handbook, reinforcing the rights of data subjects and establishing a duty of care to protect information. Secondly, they align operational activities to ensure these obligations are met. For example, a policy outlining data storage requirements would be actionable through procedures that define retention timelines for electronic and physical files, directing employees on when and how to discard information and where it should be kept.

Governance Framework

Governance provides a structured framework through monitoring, ensuring the protection, integrity, and responsible management of data. Effective governance involves business risk management and impact assessments, which are vital in analysing and safeguarding sensitive client data. This ensures an organisation’s operational integrity while maintaining client trust and regulatory compliance.

Key Statistics Highlighting the Importance of Policies and Procedures

For example, here are some key statistics regarding UK law firm data breaches:

• 60% of data breaches at UK legal firms were caused by insiders, often due to accidental mishandling of sensitive information (Information Security Office).

• 27% of breaches resulted from phishing or ransomware attacks, underlining the external threats law firms face (Legal Technology).

• 39% of breaches were due to human error, such as misconfigurations or sending data to the wrong recipient (Legal Technology).

• 12% of breaches stemmed from the loss or theft of devices containing personal information (Legal Technology).

In total, these breaches compromised data related to 4.2 million individuals, approximately 6% of the UK population. These disturbing statistics underscore why policies and procedures are crucial in preventing accidental or intentional data breaches by outlining employee responsibilities and usage guidelines. The good news is these can be mitigated relatively simply without the need to invest in expensive equipment or resources. This is typically done through the following:

Data Protection Policy & Procedure: This governs how personal and sensitive information is collected, stored, processed, and shared, ensuring compliance with laws like GDPR.

User Access Control Policy: This defines who has access to certain data and systems, implementing role-based access to restrict sensitive information.

Incident Response Policy: This provides a framework for responding to data breaches or security incidents, including notification and mitigation procedures and service-level agreements (SLAs).

Data Retention and Disposal Policy: This specifies how long data should be retained and the procedures for securely disposing of it when no longer needed.

Acceptable Use Policy: This outlines acceptable behaviour for employees when handling sensitive data, such as using secure devices and networks.

Password Management Policy: This requires strong password practices, multi-factor authentication, and regular password updates to safeguard data access.

Conclusion

Robust policies, procedures, and governance are essential for providing a structured approach to data protection, ensuring compliance with legal and regulatory frameworks while reducing the risk of security breaches. Clear policies define how data is managed, accessed, and protected, minimising the chances of human error and cyber threats. Governance plays a critical role by enforcing accountability, transparency, and continuous monitoring of these processes. Together, they safeguard client trust, protect organisational reputation, and create a secure foundation for sustainable business operations.

By implementing continuous employee training and awareness programs, organisations further ensure best practices in data handling and cybersecurity, empowering employees to be vigilant against threats.