by Jonathan D. Greenberg and Heather R. Baldwin Vlasuk
Most companies inevitably will face some allegation of internal wrongdoing involving an employee, or worse, a company official.
Such allegations typically require an investigation prior to implementation of any responsive action. The question, then, is not if there should be an investigation but rather who will conduct it?
While there are internal options, such as the human resources director, an operations officer, a high-level manager or inside legal counsel, retaining an impartial outside investigator in the form of outside counsel often is a more prudent approach.
It’s one that can infuse objectivity into what can be, at times, a highly volatile and emotionally charged situation – especially in one where the wrongdoing could be highly injurious to the company and its reputation.
The process for internal investigations of wrongdoing is something that can be clearly outlined in a company’s employee handbook, if one exists. This not only protects employees, but it also protects the company should the need for an investigation arise.
When determining whether an investigation should be handled internally or through an impartial third party, five key factors come into play:
1. Public relations control
Engaging outside investigative counsel delivers a powerful public statement. It says that a company takes the allegations seriously and is diligently, and objectively, seeking the truth. Such sentiments can go a long way in avoiding a potential public relations nightmare.
Additionally, a third-party investigation also will ensure that there is limited internal access to information gathered during the process. This reduces the risk of unwanted access and disclosure, mitigating the chance of “leaks” to the media, which can cause an already sensitive situation to spiral into something even more complicated and damaging.
2. Maintaining impartiality
In any investigation, nothing is predictable. You never know what the investigation will reveal or who might become entangled in the allegations as the situation undergoes deeper scrutiny. The company officer who was perceived as impartial and was tasked with leading an internal investigation might very well become unexpectedly embroiled in the allegations, removing any sense of impartiality.
What’s more, completely unrelated, yet problematic, issues that can create questions about the in-house investigator’s impartiality also can surface during an investigation. By beginning the investigation with outside counsel, impartiality is maintained no matter what direction the investigation takes.
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3. Improving effectiveness
Many investigations can involve questioning employees about their superiors or other higher-level officials. This does not always yield complete and honest answers as subordinates might be concerned about their own job security and do not want to risk “telling on” higher ups to an investigator from within the organization.
An impartial, third-party investigator can allay those concerns and encourage respondents to speak freely and truthfully, often drastically improving the effectiveness and accuracy of the investigation.
4. Preserving employee resources
Even investigations that are limited in scope can prove to be exceptionally time consuming. They involve numerous interviews, cumbersome document review, detailed report writing and other tedious tasks.
Each minute an employee spends on investigating an allegation, that’s one less minute he or she is spending on regular work duties. Retaining outside counsel to perform the investigation allows your staff to maintain an uninterrupted work flow during the investigation process.
5. Keeping the peace
Investigators must ask hard, direct questions in order to determine who was involved in the incident, whether actively or passively, and who was not. Those questions, by nature, may be perceived as accusatory and offensive. For example, investigators might need to ask an employee if he or she “looked the other way” while company funds were being used for private purchases.
There’s no doubt that this type of questioning, if done internally, can burn bridges and damage inter-office relationships. It also can chill the working environment, stir up internal conflicts and breed mistrust. Having an outsider ask such hard questions helps keep the peace and fosters a better working environment during and after the investigation.
The decision to bring in outside counsel to perform a third-party investigation is never an easy one, but it is one that employers must consider when faced with allegations of internal wrongdoing that could damage the organizations credibility and long-term reputation. It’s never too late to make the decision to retain outside counsel, but the benefits are greatest when that decision is made early in the process.