Depending on the nature of the business, various Acts and Regulations prescribe minimum retention periods for various records. Our courts have convicted companies for failure to keep statutory records for the prescribed period and even dismissed a defence that this failure was due to ‘clerical errors’ as “no excuse”.

Discovery in litigation: Once litigation commences or where litigation is reasonably expected, all records which could reasonably become subject to discovery proceedings or relevant to the dispute must be retained. A court can draw negative inferences or even impose penalties for improper destruction of records. Our courts are likely to have regard to certain principles derived from US cases.

Promotion of Access to Information Act: Where access to records are requested in terms of this Act, a person who with intent to deny a right of access in terms of the Act: (a) destroys, damages or alters a record; (b) conceals a record; or(c) falsifies a record or makes a false record, commits an offence and is liable on conviction to a fine or to imprisonment for a period not exceeding two years.

New Privacy Protection Laws: The SA Law Reform Commission published a draft Protection of Personal Information Bill to regulate protection of personal information by both the public and private sectors. While the objective of the proposed law is to protect personal information, in practice it translates into quite dramatic compliance requirements in respect of information security and records management practices. The proposed privacy law will require companies, employers and government to revisit their information security and records management practices and policies. Businesses processing personal information should really start considering the reasons for keeping records. It is prudent to only keep records that are truly necessary for conducting business and to ensure compliance with the law.

King II and Corporate Governance: The following extracts from a US case (Prudential Ins. Co. of America Sales Practices Litigation) underscores the role of senior management in respect of record keeping. The Judge said: "[Top management] recognised [the company’s] obligation to preserve documents in connection with the lawsuits and investigations. Yet, none took an active role in formulating, implementing, communicating, or conducting a document retention policy…When senior management fails to establish and distribute a comprehensive document retention policy, it cannot shield itself from responsibility because of field office actions. The obligation to preserve documents that are potentially discoverable materials is an affirmative one that rests squarely on the shoulders of senior corporate officers."

Audit certification: It is becoming clear from new local and international corporate and accounting law reforms that a much higher premium is being placed by regulators on proper records management practices. Records constitute the audit trails required by regulators and auditors to monitor and report on compliance. Recently promulgated laws require auditors to audit and report on compliance with record retention requirements.