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Investigating Misconduct in the C-Suite

Investigators walk a tightrope between protecting the company and themselves

Posted by Dawn Lomer on September 30th, 2015

Investigating top-level executives can be a harrowing, intimidating exercise for even the most seasoned investigator. There is so much more at stake than there is in a standard investigation of employee misconduct. That’s why communication, relationships and an official protocol, or playbook, become so important

In a session at the ASIS 2015 conference, a panel of corporate security professionals discussed  the challenges of investigating crime in the C-Suite and laid out some solutions to tackle the issues. Recurring themes brought up by the five panelists point to the importance of thinking outside the box, outside the company and sometimes outside the country.

Legitimate Fears

Having a stable of experts in the country in which you are conducting the investigation can be helpful.
C-suite investigations are intimidating for a whole lot of reasons, beginning with fear of retaliation against the complainant, witnesses and against those carrying out the investigation. It’s a legitimate fear when investigating someone in a position of power.

Investigators might be afraid not just for their jobs, but for their lives in some countries, pointed out one panelist, adding that things can get pretty rough for investigators poking around in the business of a CEO in a country such as Mexico, Russia or China.

Having a stable of experts in the country in which you are conducting the investigation can be helpful. Not only do they have better access to the information you may need, but they have the knowledge about local customs and unwritten rules. They can stop you from making embarrassing, dangerous, or even fatal, mistakes.

One example that comes immediately to mind is the case of Peter Humphrey, a UK investigator who was jailed in China, along with his Chinese wife, last year after purportedly illegally obtaining Chinese citizens’ data while investigating a top Chinese official at GlaxoSmithKline. The company, GSK, was in the middle of a corruption scandal for which it was fined $465 million. The couple admitted to buying information but said they didn’t know it was illegal. Both Humphrey and his wife were released after serving just under a year of their sentences.

Internal vs External Investigator

Tapping outside experts too soon can result in bad publicity, reputation damage and public mistrust.
One of the most important considerations when allegations about a senior executive surface is whether to use internal or external investigators. There are advantages and disadvantages to both.

Using an internal team keeps the allegations under wraps, at least until it can be determined whether or not the allegations are legitimate. Tapping outside experts too soon can result in bad publicity, reputation damage and public mistrust.

On the other hand, using an internal investigative team for a serious allegation against a high level executive suggests a coverup, and that can cause even more damage. Can internal investigators be trusted to thoroughly investigate the CEO of their own company? Given the pressures on them when investigating their own employer, the risks to their jobs and the possible implications for their careers, it can certainly be argued that outside teams make the most sense.

One thing is for sure, if you use an external team for the investigation, it shouldn’t be the same law firm that is providing you with legal advice. Can you spell conflict of interest?

Protocols and Playbooks

even if you do everything by the book you still risk public scrutiny in these investigations.
Call them what you will, having a formal procedure outlined for high stakes investigations makes a lot of sense. In fact, this makes a lot of sense for any type of investigation, but it becomes so much more important when the investigation involves the C-suite. A formal protocol can provide at least some level of protection if the investigation is questioned.

Of course, even if you do everything by the book you still risk public scrutiny in these investigations. But if public perception is that you didn’t conduct the investigation properly, and you can show that you had a formal procedure, followed it to the letter and documented the entire process, you’ll be a lot better off in the courts of law and public opinion.


Dawn Lomer
Dawn Lomer

Manager of Communications

Dawn Lomer is the Manager of Communications at i-Sight Software and a Certified Fraud Examiner (CFE). She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery, and hosts i-Sight webinars.

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