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Prompt Investigations and Demonstrating a Commitment to Ethics

Companies must conduct fair and reasonable investigations in order to demonstrate a commitment to ethics and compliance.

Posted by Joe Gerard on April 1st, 2010

The longer a company waits to begin an investigation, legal liability becomes increasingly serious. Companies must conduct fair and reasonable investigations in order to demonstrate a commitment to ethics and compliance. However, what actions justify a strong enough commitment to workplace ethics? How promptly must I begin an internal investigation? Some people worry about “jumping the gun” on plunging into an investigation before enough information is gathered. However, it’s most liely there is no such thing as “too early” to begin an investigation. In order to comply with laws and regulations, prompt investigations are mandatory.

Definition of a Prompt Investigation

The Management Practices Group article “Who You Gonna Call? The “Key” to a Proper Workplace Investigation” provides a very realistic definition of what it means to begin a prompt investigation: “Effective investigations must be reasonably prompt both in initiation and completion.  “Promptness” is a relative term, of course.  The practical human and travel-related considerations involved in investigations that cover a lot of geography are obvious.  Additionally, more complicated or more serious investigations simply take longer to accomplish. Nevertheless, global employers should remember that some jurisdictions, for example, Spain, impose strict time limits on certain types of employee investigations.” Promptly starting an investigation is important for many reasons. Beginning an investigation right away helps to reduce the liability of the company involved should the case be brought to court. Starting right away allows for better preservation of evidence.

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If the subject is aware of a pending investigation, they could try to delete or destroy data and evidence related to the case.  Evidence destruction makes internal investigation much harder to conduct. Lagging the start of an investigation allows more time for the misconduct or fraud to occur. In the case of harassment or discrimination, this could turn an uncomfortable situation into a very hostile work environment. The escalation of the case could land the company in court. If the investigation continues to drag out and isn’t completed in a timely manner, the investigation can begin to get very expensive, as a lot of time has been wasted.

Demonstrating a Commitment to Ethics

Some would argue that a commitment to ethics means writing policies and procedures outlining corporate culture and abiding by federal (or state, provincial, regional) laws that govern the workplace. Others would suggest that a demonstrating a strong commitment to ethics goes much further than handbooks and bare minimum legal requirements.  Going above and beyond includes training employees on company ethics policies and programs, developing an ethics committee and assigning the role of Chief Compliance Officer, implementing anonymous reporting hotlines to gather and evaluate complaints, the use of investigation software and case management solutions, as well as numerous other tools to help employees understand  the company’s commitment to ethics.

Essentially, determining a company’s level of commitment to ethics can be distinguished by actions and the level of  involvement in bringing policies to life- becoming a matter of actions speak louder than (written) words. If there’s no action taken or training provided once the code of ethics was created and handed out, it’s likely that there is a low commitment to ethics in that particular company. If employers and management are constantly training, conversing and engaging their employees in ethics related issues, chances are, the level of commitment to ethics is significanly higher.

In the Management Practices Group article “Who You Gonna Call? The “Key” to a Proper Workplace Investigation, they shed some light on the handling of companies that demonstrate a commitment to ethics: “Reasonable investigations require demonstration of serious organizational commitment to legal compliance and to resolving the particular problem at issue in a whole-hearted and appropriate way. In an effort to determine whether to pursue charges against a company, regulators in many countries are trained to look at the extent to which an organization has prioritized and/or devoted resources to preventing and correcting illegal behavior.” In our post “SEC Investigations: The Enforcement Cooperation Initiative,” we discussed the issue of companies in court to being given credit or decreased sentences if they are able to demonstrate a commitment to ethics in their workplace and cooperate during investigations. For employers, it’s important to keep in mind that people make mistakes and cases can end up in court. However, a commitment to ethics and documentation of related efforts to enforce ethics internally changes the way investigations and court cases are handled. Having the necessary proof to demonstrate the precautionary measures taken to fight fraud at any company must be made available to prove company actions in court.

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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