Electronic Signature Policy

Technology is a critical component of all aspects of business. Increasingly, business leaders, customers and employees expect to execute documents conveniently with assurance that the signature is secure and compliant. To meet that need, e-signature technology must be implemented with appropriate security controls. In addition, a well-developed e-signature policy will simplify the process for any organization.

Electronic signatures transform the way organizations do business. Not only does it eliminate the hassle of sending paper agreements for wet signatures, it also speeds up signature and approval processes dramatically. The first step to implementing electronic signatures is to incorporate the process in your existing approval workflow and establish a master signature policy. This policy should explain the terms and conditions under which an electronic signature can be created or validated.

How can you develop an e-signature policy for your organization?

A strong e-signature policy sets forth the guidelines for using e-signatures and helps ensure the signature processes comply with local and global laws, as well as regulatory guidelines. CLOC has developed sample policies ranging from least restrictive to restrictive to aid in launching a master policy within organizations.

Considerations in developing an e-signature policy
The first step in drafting an e-signature policy is to evaluate your agreement approval process to find the right signature approach for your organization. You’ll need to balance regulations and risks, and consider what level of effort is necessary to make your business transactions legal and secure.

  1. What type of documents will you allow to be signed electronically? Define your acceptable agreement types and their sensitivity level. Many times organizations will start with low risk agreements, like NDAs, or low dollar procurement and statement of work agreements. Some may even consider employment documents like an offer letter.
  2. What kind of signatures will you be using? Define signature types. You may want to start with a very restrictive policy and then modify to be less restrictive as your organization becomes more mature. By accepting simple signatures, you may dramatically speed up your contract processing efforts.
  3. Where are you doing business and what is the local law on electronic signatures? E-signature laws vary from country to country. Develop a summary of jurisdictions in all the countries where you do business.
  4. Who has authority to sign and how do you authenticate? Since documents can be legally binding, it is important to establish restrictions as to who in the organization can sign specific document types. This is important to consider if you operate a global business with multiple entities, as this may impact tax laws and regulations.
Provisions to include in your e-signature policy
  • Consider using US governing law to further reduce risk which puts you into a venue that robustly supports e-signatures.
  • Define any exceptions to your signature process, such as delegation to non authorized signers.
  • Ensure standard document management and retention.
  • Update templates with express consent to do business electronically.
  • Give signees the ability to opt-out of an e-signature.
  • Lots of other creative possibilities
    • Organizations may use simple electronic signatures but require a scan of a handwritten signature.
    • Use simple signatures for 98% of all business and use handwritten signatures for the other 2%.
    • Use a pilot program in certain divisions/groups, or an agreement type rollout. There’s a lot of flexibility in choosing what works best for your business.
Once you know the approach you would like to take, make it easy for your users to understand by defining the purpose, explaining the process, and provide a summary of the policy. Make sure to also define the terms using the policy guidelines and communicate the policy to all stakeholders through the organization.
Resources and Tools
External References

Thank you to the members of the legal ecosystem who participated in the creation of this initiative.

Core E-signature Team
  • Connie Brenton, NetApp
  • Lisa Konie, Adobe
  • Dan Puterbaugh, Adobe Systems
  • Dan Coll, Jabil