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Corporate Internal Investigations: Understanding the Basics

Corporate Internal Investigations Understanding the Basics

How to make my corporate internal investigation helpful and not harmful to my organization?

What is a corporate internal investigation?

Corporate internal investigations fill more and more headlines in our modern world of non-stop news and social media, and thus, have come under more scrutiny than ever before. Whether addressing a public gaff, an internal harassment complaint, a sensitive employee exit, or other general suspicious activity, the legal and reputational results of an improperly run internal investigation can be devastating to an organization’s persona.

Conducting an effective and efficient internal investigation requires that your organization have a plan and process in place before the need for an investigation arises. Not only does this show that the organization takes the relevant issues seriously, but it helps the facts, analyses, and conclusions reached during the investigation withstand legal scrutiny later on.

Who is involved in a corporate internal investigation and what are their roles?

Long before your first internal investigation need arises, it’s important to consider and identify who will lead the investigation effort. Depending on the subject matter, the size of the organization, and the resources available within, corporate internal investigations may be led by:

  • the legal department;
  • outside counsel;
  • internal trained HR and/or IT resources; or
  • a dedicated internal investigation task force.

If your organization does not have professionally trained and experienced personnel internally who are truly qualified to conduct an investigation, seek professional assistance before you proceed. The worst thing you can do is contaminate your investigation results by not following basic evidentiary and investigatory procedures and standards. This will render your entire process – and anything it uncovers – meaningless and inadmissible.

PRO TIP

Be careful not to assign people to an investigation just because they have the necessary technical know-how. For example, just because your Information Technology team knows (or can figure out) how to use the investigative tools found in many enterprise software solutions (like the Compliance Center in Microsoft 365 or investigative and eDiscovery functions found in collaboration tools like Slack), doesn’t mean they are qualified to conduct an internal corporate investigation. It’s crucial that the personnel conducting the corporate internal investigation are properly trained, so the investigation is conducted correctly and the results are usable for any future legal needs.

What is the first step in any corporate internal investigation?

The first step in any corporate internal investigation is to determine what events inside your organization could prompt, or trigger, such an investigation. Some common triggers are:

  • Complaints about a hostile workplace environment
  • Sexual or other harassment
  • Suspected employee theft
  • Sudden departure of key employees (especially if they immediately join a competitor)
  • Product defects or malfunctions
  • Improper access to or use of personal medical or financial information

Your management team should meet to specifically discuss potential triggers within your organization and determine how to identify such events at the earliest stages.

Simply put, you really can’t design a process for handling internal investigations without first understanding where triggering events may arise. If you haven’t thought about what could trigger an internal investigation within your organization, then you’ve created blind spots where substantial risks can occur and grow unnoticed—at least not at first.

Once you’ve established potential triggering events, make sure that your organization has sufficient policies, practices, metrics and monitoring in place to help identify any issues in those areas as quickly as possible. That process should include not only detection, but details on what departments and which individuals (legal, managers, HR, etc.) to notify when such an event (or potential event) occurs. 

What do all corporate internal investigations have in common?

Regardless of the unique aspects or needs of any given investigation, the most important commonality is the need to identify and preserve key data and systems. The investigation process itself can take innumerable forms, depending on everything from the nature of the issues, to complaints triggering the investigation, to the systems and software involved in the investigation itself. But the need to preserve key data quickly and properly is universal.

Even before the investigation starts in earnest, the complaint, incident, or report that triggered the investigation will likely identify key assets and resources for preservation. You must identify those systems, solutions and software known to potentially hold critical information (a.k.a. evidence) and preserve any data that exists there. 

For example, if a product defect claim is made, the product design, manufacturing and related information should be targeted for immediate preservation and any routine deletions suspended. If a sensitive employee (e.g., a salesperson, executive, product developer) leaves suddenly and joins a competitor, all their emails, chats, computers, and mobile devices should be quickly secured and preserved. Whatever the triggering event, common sense alone will help identify such key resources, and immediate steps should be taken to protect and preserve those resources and associated data.

Conducting a Corporate Internal Investigation

Before you start, make sure you have answers to the following:

  • Who will take the lead on identifying interviewees?
  • Who will collect and analyze data from relevant systems?
  • What are the core questions that the investigators are trying to answer?
  • Do I have full agreement by all involved (managers, executives, internal or external investigators, and counsel) on the needs, expectations, and desired end result of the investigation?

Gather facts from the individuals involved, using:

Interviews

The best place to start the investigation itself is by talking to the individuals involved. This can be done through one-on-one conversations or with questionnaires where appropriate, like when a larger group of individuals is involved. You might start by speaking with a few key individuals and then developing a questionnaire after that for a larger group – it all depends on the nature and dynamics of the subject matter. And don’t feel that you only get one shot – you can always go back and ask more questions or conduct an additional questionnaire.

Questionnaires

Questionnaires are incredibly useful, especially when collecting information from a larger group of people. You can gather a large amount of information quickly and in an organized fashion that will help you more easily access and analyze key facts. Questionnaires will help to identify key players for prioritizing one-on-one conversations. This helps you avoid wasted time with individuals who had little to no involvement and have little or no relevant information to relate.

Interview + Questionnaires

While questionnaires are highly recommended and can be extremely helpful, don’t rely on them alone as the end-all-be-all for identifying key data and systems. As you speak with individuals, review their answers to any questionnaire and ask about the resources they used in their daily work efforts as you review with them the issues and claims involved. People will often recall additional systems, software or other resources that may hold valuable information that they simply didn’t recall out of context or when completing the questionnaire.

PRO TIP

As you discover additional information resources (be they electronic, paper, or whatever), you can add those resources to the overall data preservation efforts. By taking immediate steps to preserve essential, known resources, and complementing those as you conduct your investigation and learn more, you’ll be in a much better position should the issues proceed to legal actions.

Follow every lead.

The investigation itself should start with the key players and known facts but will nearly always take you places you didn’t know or expect. A competent, trained investigator will know how to follow the various tendrils of an investigation and ensure that it is thorough and complete. It’s important to follow every lead, question each person thoroughly, and examine every possible avenue that arises, even those not directly related to the core issues at the heart of the investigation. Failure to do so may in itself expose the organization to further risks or damages due to incompetence.

Take the common example of an exited employee suspected of stealing the organization’s most sensitive trade secrets on the way out the door. If the investigator learns that the exited employee also was mistreating other employees prior to exiting, those mistreatment claims must be investigated as well; they cannot be ignored simply because that mistreatment wasn’t the subject of the investigation. In such situations it may be appropriate to start separate, parallel investigations, but the claims themselves cannot be disregarded or brushed aside.

A Note on Privilege

While not the focus of this blog post, it is important that you take into account any potential privilege considerations. Investigating a sexual harassment complaint, or an employee’s activity that resulted in a data breach (which may include analysis of the breach itself), will very quickly become the target of discovery requests and deposition questions. 

Before you begin a corporate internal investigation, especially in sensitive matters, consult with counsel to determine the best course for ensuring that privileged information and actions remain privileged. While the facts of a given event are rarely privileged, when conducted properly, and under appropriate circumstances, internal investigations can be protected by attorney-client and or attorney work product privileges. 

Specifically discuss the end goal and how that affects any privilege considerations or concerns. Is the investigation intended to focus solely on gathering facts? Or is there also a desire to develop recommendations and identify necessary remedial actions? You may want to bifurcate the fact-gathering from the analysis and recommendations tasks to help further protect any privileged information from unintended exposure.

Reporting on Corporate Internal Investigations

Any investigation should conclude with a written report summarizing the overall process, procedures followed, and information learned. A proper report should include:

  • an executive summary of the investigation findings and conclusions;
  • detailed and supported review of the essential facts and information discovered; 
  • a thorough timeline; and
  • a players list and fact sheet.

A competent, trained professional will take copious notes and keep impeccable records as the investigation proceeds, building on those with each additional interview and information review. The items listed above will become essential to piecing together the overall history of the issues, events, and circumstances, and they will form the basis for the investigatory report.

Depending on the situation, the experience and responsibilities of the investigator, and certain legal considerations (e.g., privilege), the final report may or may not include recommendations for further actions, remedial measures, and the like. 

What’s next?

In the Great Resignation environment, ineffective internal investigations have led to mass internal turmoil and even mass resignations. Don’t let your organization fall victim to that turmoil. Whether you have a seasoned internal team that conducts investigations as needed or you’ve never had to conduct one before, you should be thinking critically and planning for the eventual need. 

In the end, there’s no single magic process to follow in an investigation, but the overall process should follow the recommendations above to help ensure:

  • the success of the investigation itself;
  • the usability and admissibility of any findings; and
  • the process itself—that it doesn’t generate new risks to the organization.

No matter the size, nearly every organization will, at some point, need to conduct an internal investigation. BIA has assisted corporations, law firms and governmental agencies with innumerable investigations over the years. Contact us today for help preparing your internal team or to learn how BIA can assist with any corporate internal investigation needs.