Avoiding the Headlines Through Internal Investigation

Going public about mistakes or product defects as soon as they are detected is one of the best things a company can do to preserve their brand name.

Posted by Joe Gerard in Ethics & Compliance, Human Resources on March 1st, 2010

Going public about mistakes or product defects as soon as they are detected is one of the best things a company can do to preserve their brand name. Major lawsuits have been filed against companies for negligence- one example is Merck, the makers of Vioxx, that were aware of the potential side effects of the drug for a “few years” before pulling it off shelves. Most recently, we’ve seen the heat that Toyota has taken for not reacting fast enough to complaints about faulty parts in some of their cars.

Immediate Reporting:

Last week at the 2010 Global Ethics Summit, Charles Harrington, the CEO at Parsons stated that:

“Direct and immediate disclosure of ethics violations to customers is routine procedure at Parsons. All of Parsons’ values are communicated to Board at every meeting, along with ethics issues that occurred since last meeting.”

Mirroring the trend of immediate exposure is the proposed US Sentencing Commission Plan, giving credit to those who establish a compliance program within their workplace and quickly report any misconduct, as discussed in our previous post “2010 Global Ethics Summit: Compliance Enforcement.”  The public places a lot of pressure on companies to report defects and mistakes as soon as they are detected- and rightfully so. Companies that fail to report problems immediately find themselves in the headlines, facing backlash from the public and are left to build back consumer trust to restore their reputation.

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Early Detection= Public Knowledge:

Are there really any benefits to withholding knowledge of faulty products or ethical misconduct to the public? Consumers depend on companies to be responsible. The easiest way to prevent these mistakes from happening is through internal controls. If a concern is brought up during product testing and trials, chances are, the concern will still be present when the product is available to the public. In the case of Toyota, Toyoda mentioned that their “rapid expansion had taken some of the focus off safety”- this could have been easily prevented internally. Encourage employees to speak up about changes that have occurred in the workplace that could put your company or your customers at risk. Remember: Mistakes happen – all you can do is work to reduce their frequency in an attempt to eliminate them. When mistakes occur, address the public immediately. Let them know your plan of action to correct the wrongdoing. Acting immediately and taking responsibility will make a positive difference in how the public continues to view your brand.

Solutions:

The main problem we see with many companies that find themselves in the headlines over these issues isn’t a lack of information, but simply, the lack of action with the information they have. Ideally, you want your employees or other managers to speak up to you when they notice risks in the workplace, in order to avoid the issue going public at all. With internal reporting being one of the easiest ways to detect errors and incidents as soon as they occur, you need to make sure that you have the proper tools in place to react and investigate immediately. i-Sight Investigation Software provides businesses with the speed they require when addressing ethics violations and other internal incidents. When an internal complaint is made, a case is generated and must be assigned to an investigator. Once the investigator has confirmed their acceptance of the case, all of the investigation tasks can be managed in one place. When cases are left inactive or their priority level changes, notifications are sent to you through e-mail, in order to bring your attention back to the case and stop issues from falling through the cracks. Solutions, such as i-Sight, allow you to be notified when a complaint is made, but it is still up to you to determine how you are going to address it.


Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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