Internal Investigation Procedures (Part I of IV)
This is the first of four postings on internal investigations. The focus of these postings is not the high-profile internal investigations which are regularly disclosed to the SEC or reported in the press. Instead, I am focusing on “routine” or day-to-day internal investigations which are conducted to handle a variety of issues.
The art of day-to-day internal investigations has been ignored in favor of media reports on high-profile, high-stakes internal investigations. Do not get me wrong, there is a time and place for important internal investigations. But companies need to plan in advance for conducting routine internal investigations which occur on a regular basis.
Every compliance program needs to include a basic protocol for handling day-to-day internal investigations. Internal investigation procedures need to be in place to handle day-to-day issues which arise when employees are alleged to have violated company rules or codes of conduct. Such a protocol will protect a company from subsequent challenges of unfairness or failure to investigate allegations of misconduct.
The elements of an internal investigation program include:
1. Written Internal Investigation Policy – this document should be used to explain allegations which can trigger an internal investigation, the process for conducting the investigation and the handling of investigation results. Internal investigations are not limited to employment matters but include a range of issues involving employee misconduct.
A written policy informs employees what to expect from the process and emphasizes the company’s commitment to fairness. It should describe how an investigation is started, how the investigation is conducted, proper documentation, how a decision is reached and communicated.
2. Objective Investigator – the investigator must be qualified and independent, meaning the investigator is objective. The investigator should be trained or experienced in conducting investigations. If necessary, an external expert should be used. If the investigator is biased, or conducts the investigation in a biased manner, then the investigation will provide little protection and may even cost the company in litigation
3. Timely Investigations – internal investigations need to be conducted in a timely manner to enhance the perception of fairness. Delay can be interpreted as motivated by a desire to brush an issue under the rug. Therefore, investigations should be completed as soon as possible after a complaint is filed, or the potential misconduct is discovered. In routine cases which are not very complex, an investigation should be completed and resolved within thirty (30) days. Some investigations, such as those involving complicated issues like harassment or theft, should take longer.
4. Interviews – an internal investigation should include witness interviews. It does not mean that every possible witness has to be interviewed. The investigator should interview every witness who has relevant information to the accusation, or who may be important to determine the credibility of a critical witness or the suspect. If there is a complainant, the investigator should interview him or her early in the investigation to determine the nature of the allegations. After the investigator learns more about the case, the investigator should interview the complainant again so as to evaluate the complainant’s credibility against all of the evidence.
5. Evidence Evaluation – an internal investigation is only as good as its evidence. It has to be thorough and fair. Hearsay has no role in internal investigations. Allegations must be documented and resolved based on reliable evidence. If a company acts based on hearsay or other unreliable evidence, the company’s integrity will be destroyed. Similarly, if a company fails to conduct a thorough investigation and ignores significant evidence, the internal investigation will not protect the company.
6. Documentation – every step in the internal investigation should be documented. The fairness of every investigation depends on the written record which establishes the steps taken by the company, and the reasons for its decision. A written record is essential to protect the company.
7. Information Security – iinformation gathered during an investigation has to be secure and strictly controlled. Reckless disclosure of information causes rumors, damages productivity, and creates liability for the company and the investigator.