What Is a Policy Statement?

by Victoria Duff; Updated September 26, 2017
Business meeting

With as many policy statements as there are organizations to make them, these statements clarify intent, describe the means by which a company administers the policy and defines the particulars of it. Policy statements serve to protect an organization from misunderstandings that might lead to unauthorized behavior or lawsuits. Each policy statement should include its purpose, terminology definitions, the statement itself and the steps to implement it.

Policy Purpose

The first part of a policy statement states its purpose. One organization can have many policy statements. For example, in human resources, one policy statement might cover the company attitude toward appropriate dress because the company wants to project a certain image to its customers. Another HR policy statement might detail the company's employee travel policy. It might contain what the company pays for and what it does not. In the same company, a marketing department policy statement might describe company policy on the ordering of graphic art and photography.

Terminology Defined

The second part of a policy statement provides the definitions of key words or interpretations of terminology in the policy. After this the policy may include a list of the people the policy applies to, the person within the company who has the responsibility to monitor adherence to the policy and how and to whom appeals may be directed in case of disagreements. With internal company policies, you often find the procedures or the steps for administering the policy following the third part of the policy.

The Policy Statement

The third part of a policy statement describes the entire policy, how the company applies it, who or what is exempt from the provisions of the policy statement, the way in which misunderstandings and infractions are to be remedied, and how long the policy remains in effect. By using policy statements in an employee handbook, for example, a company can avoid confusion amongst its employees by clearly detailing what is expected of employees in specific situations.

Policy Functions

Policy statements also function as gatekeepers. If a person wishes to paint his office orange, for example, a policy statement defining company logo colors as the standard office colors allows his supervisor to avoid a nasty confrontation by simply handing over a copy of the policy statement that defines this. Clear policy statements can lessen the risk of conflict and remove the opportunity for unfair selective application of rules.

Policy Procedures

Beyond company employee handbooks, individual departments may have their own policy statements that reflect adherence to rules or legal requirements. In accounting departments of companies that sell stock, the accounting department must adhere to generally accepted accounting principles established by the government when preparing financial statements for public review. One way to ensure that accounting personnel follows these rules and laws is a set of policy statements that depict the manner in which the department adheres to these rules.

About the Author

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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