In a prior post, we wrote about why you may need an internal investigation.
Once you decide an investigation is necessary – what’s next? In this post, we will discuss who how to select an investigator. In follow-up posts we discuss planning and conducting the investigation, and documenting and following-up on the results of the investigation.
Deciding who will conduct the investigation.
Generally, internal investigations are conducted by someone inside the organization or by outside counsel. Depending on the nature of the allegation, there may also be reason to hire private investigators or other professionals in order to conduct technical reviews such as audio or video surveillance, a computer forensic search or a forensic accounting examination. But by and large, investigations are run in-house or through counsel.
An in-house investigation should be led by someone with independence. Of course it does little good if your “independent” investigation is led by someone who is not-so-independent. Independence is not determined by the quality of the person nominated to run the investigation, but rather the perception of independence. Below are just a few of the considerations.
Does the nominee have a stake in the outcome? Certainly you would not appoint someone who is in the department where the misconduct occurred. But did the nominee work in the department in the past – a former head of the department, or someone currently in the chain of command, would be perceived as benefiting by not finding systemic misconduct that may be traced back to her leadership. If the nominee wants to be in the department in the future, she can’t win for losing – find fraud and the perception will be that she is clearing space for herself, find nothing and the perception may be that she wants to make it comfortable for when she is there in the future. Does the nominee have a personal stake in the outcome – a personal bias for or against the target of the investigation?
Aside from having a stake in the investigation, the nominee must be perceived as free from influence. To assess this issue, consider the position of the target. Rarely should a peer be investigating an employee. Better that the investigator be at least a step above (and in a separate department/chain of command). Someone new to the organization may not always be the best nominee, but depending on the position and background, may be perceive as the most independence as no allegiances have yet been created.
Finally, consider the temperament and skills of the nominee. Have you selected someone who can patiently collect and consider the evidence? Is it someone who fosters trust among the other employees – will the witnesses be open and honest in sharing facts? Generally, a good investigator must actively listen, be able to process and rapidly respond to new information, possess critical thinking skills, and have a solid knowledge of company policies and practices. Other technical qualifications will depend on the type or complaint at issue. For example, an accounting background might be necessary for charges of financial mismanagement
If an in-house investigation is not feasible for any of a number of reasons, such as the nature of the allegation, the target of the investigation, the structure of the company, or any of a number of other reasons, many organizations turn to counsel to lead the investigation. Outside counsel may be familiar with the organization and its leadership, enabling counsel to step in with little “catch-up” time. In rare cases where an organization has regular outside counsel, an independent counsel may be engaged so that the fact-finding is separated from the recommendation for action. Counsel are often engaged because the skills of many attorneys match with the skills necessary to investigate misconduct – quickly understand the circumstances (the allegation), develop facts through witness interviews and review of documents, and identify likely causes and conclusions. Engaging reputable counsel enhances the perception of independence that in-house investigations must often battle. Biases and susceptibility of influence, common concerns in an in-house investigation, are rarely at issue when outside counsel is brought in. Further, counsel are typically cloaked with a presumption of competence and professionalism. All of these perceptions result in increased cooperation during the investigation and acceptance of the findings after the conclusion.
For a thorough discussion of these issues, or if you have other questions on how to best protect your company, please contact Bill Bock or Steve Runyan of our Investigation and Crisis Management Team, or one of our attorney’s here. It would be our pleasure to assist you.