The treasury policy is a document, generally and preferably approved at board level, that gives treasury staff written guidelines on what they are responsible for, how they should go about this, what their boundaries are and how their performance will be measured. Most treasuries deal with derivatives and so to must their policies.
It may be stating the obvious, but it needs to be said that derivatives are complex instruments that, by their complex nature, make them potentially dangerous to the finances of any business that uses them. Properly understood and utilised, they are invaluable for risk management but they have the potential to destroy companies and the careers of those who use them.