Every company should have a policy for what records to keep and what to discard…and should review it annually.

On the business side, a good policy can make sure that records are kept consistently and are accessible when required. It should balance the need for careful records against the cost of keeping outdated or useless materials.

But there are important legal considerations as well. For instance, a number of federal and state laws require certain records to be kept (including those pertaining to taxes, workplace safety, and family and medical leave). Failure to keep these records can result in government penalties.

In addition, if a company is ever sued, it might be required to produce certain records…and if it can’t do so, it could spell trouble, because a court might assume that whatever the records would have shown is bad for the company.

A court will likely be far more understanding if a missing record was destroyed pursuant to a clear, sensible policy, rather than randomly or arbitrarily.

Once you establish a policy, it’s a good idea to review it at least once a year with an attorney. This review can examine new government requirements, changes in the business that necessitate new record-keeping, and new types of communication in which the company is engaged.

For example, if a company allows employees to keep documents or use e-mail on their home computers, or does business through blogs, Facebook, Twitter, or other forms of social media, a new records retention policy might be in order.