In a fast moving and rapidly evolving business environment, which is undergoing a transformative shift to digital communications – it is increasingly important for businesses to protect themselves against legal, financial, and reputational risks, says Yossi Hasson, CEO of SYNAQ.
Many of these risks will come in the form of existing and new legislation, as regulators and lawmakers strive to keep pace with innovations and developments linked to the use of digital platforms and new data storage capabilities.
One powerful and particularly important example of legislation impacting business practices can be found in the way companies are being required to store and archive e-mails.
E-mail archiving is the process of capturing, preserving, and making easily searchable all e-mail traffic to and from an organisation.
E-mail archiving solutions capture e-mail content either directly from the e-mail server itself (labeled journaling) or during message transit. The e-mail archive can then be stored on magnetic tape, disk arrays, or more commonly these days, in the cloud.
Legal data records
Few could argue that e-mail has become an essential business tool, yet many companies still fail to recognise that like other information they possess and generate, it requires proper storage and management.
Unsurprisingly, digital records are now regarded as functional and legal data records, which means that proficient storage and retention methods must be put in place to secure and accommodate electronic communications.
One of the primary reasons for the increasing calls for digital information to be securely stored and retained is for evidentiary purposes. Sections 14 and 15 of the Electronic Communications and Transactions Act, for example, touch on the originality, admissibility and evidential weight of data messages, respectively.
Currently, the standard practice in South Africa is to retain e-mail for three years. There are some exceptions to this rule, such as under the Companies Act, whereby electronic documents may have to be retained for up to seven years. Under the VAT Act, for example, electronically generated tax invoices need to be stored for five years or more. (The Value-Added Tax Act, No 89 of 1991 (VAT Act) requires that an invoice be presented as a ‘document’.
With regards to the provisions of the ECT Act, a ‘document’ includes a data message and sending an invoice in electronic form will be acceptable for purposes of the VAT Act, subject to certain requirements – such as storage – being met.
It is also important for businesses to be aware of the fact that the King Report on Corporate Governance for South Africa states that directors are responsible for risk management and – specifically with regards to IT – that they have a responsibility to ensure that an effective internal control system is in place.
This underscores the point that electronic document management should be a top priority not just for CIOs and IT departments, but also for executive leaders. Failing to prioritise document management – which naturally includes e-mail and proper e-mail archiving – can put directors at risk of heavy penalties and even, in some cases, imprisonment.
Stuck in history
For most companies, relying on existing, and in many respects, outdated methods of managing their e-mail, is risky business. Current and impending legislation, which is likely to get even tougher on electronic document management, calls for companies to explore various e-mail archiving solutions.
When deciding on the right solution, businesses need to make sure that it complies with the requirements of the Electronic Communications and Transactions Act and associated laws/legal frameworks.
In short, it is critical to remain compliant and up to date with regards to the retention and storage of all electronic communication – not only from a legal and financial perspective, but also from a purely reputational viewpoint.
With effective e-mail archiving, for example, businesses can respond quickly and decisively in the event of complaints against them. Moreover, efficient digital record keeping enables a business to run all the more smoothly, responding to both internal and external requests with ease.