What is the primary purpose of a privacy policy?

The primary purpose of a privacy policy is to outline how an organization collects, uses, stores, and protects personal data. This document is crucial for informing individuals about their rights and how their information is handled, which builds trust and transparency between the organization and its stakeholders, including customers and users.

A privacy policy addresses key elements such as the types of personal data collected, the legal basis for processing that data, how the data may be shared, and the measures taken to safeguard it. Furthermore, it often details individuals' rights regarding their personal data, such as the right to access, correct, or delete their information. This is especially important in today's regulatory environment, where laws like the GDPR and CCPA emphasize the need for organizations to clearly communicate their data practices to users.

The other options focus on unrelated aspects: describing an organization's financial status is not relevant to privacy issues; guidelines for employee conduct are generally part of an employee manual rather than a privacy policy; and promoting company products and services, while important for marketing, does not align with the primary function of transparency in data handling which a privacy policy serves.