Template:Policy no disclosure capsule

Being a high-modernist preference for form over substance, policy carries some “transubstantiation” risk. If we take it that a policy is a heuristic designed to simplify and financialise the infinitely variable ways of doing business for the betterment of the organisation who creates it, it follows that the organisation should maintain abolute control over the change or cancellation of the policy. Sometimes we make mistakes or times change.

The last thing an organisation wants, therefore, is to be beholden to outsiders for the rules of its internal governance. It is one thing to tell staff this is how we expect you do to things: to tell customers is to convert an internal heuristic designed to keep your organisation straight into a contractual straight jacket that it must follow on pain of litigation if it does not.

The risk — somewhat chicken-lickeny but yet compelling — is that by doing so you inadvertently represent that the policy is meant to benefit the customer and find that adhering to it is now a contractual obligation, whereas it was only ever meant as an internal governance mechanism. It was not meant to be a rod for the organisation’s own back, that is to say.

Therefore, you will often see it declared by legal eagles that internal policy must not be disclosed to customers or external parties except where required by regulation.

An example from the annals of employment law:

The law requires employers to be substantively and procedurally justified when disciplining employees. They must follow a fair process when deciding to discipline an employee. Employers who do not give an employee a fair chance to explain herself, improve or provide mitigating factors may be liable for unfair dismissal even if, on the substance, its decision was justified.

Many HR departments therefore formulate a generic internal policy setting out recommended steps when conducting a disciplinary procedure. Of course, every situation is different: If it is to cover all kinds of incidents, a standardised process will, in many cases, be over-engineered. Plainly one could conduct a fair process without religiously following every step.

Now, if that policy is incorporated into the staff handbook or employment contracts it then becomes a contractual term which must be followed and any failure to follow it to the letter will be a formal breach of process. It would be prudent, therefore, not to incorporate such a policy into terms of employment, or even disclose it to all staff, where regulations do not require it.

Where a policy is of interest to a customer or a third party, you might create a public summary document outlining the terms of the policy, but noting that it is a non-binding summary, may be changed or removed without notice and is not intended to create any contractual obligations between the firm and any third party.

For example, FCA regulations require firms to disclose details of their best execution and order handling policies, but not the policies themselves.