The Risk of Incompetent Investigations

A blog by Compliance Week editor, Matt Kelly on the topic of the recent Renault fiasco (as he eloquently puts it), reminded me of an assertion I frequently make in my presentations:

“A poorly performed investigation can cause more damage than the suspected misdeed.”

Here are guiding principles I used when I was responsible, as CAE, for performing investigations or for assessing the adequacy of investigations performed by others (such as Human Resources):

1.       Investigations should only be conducted by appropriately trained and experienced professionals.
I have seen the morale and effectiveness of organizations destroyed by ‘amateur’ investigators. The first time this happened to me was when an investigation into alleged inappropriate employee behavior was performed by a manager in the Human Resources department. The investigator was an excellent HR representative, but had no training in investigations. She also was not provided any assistance from a more experienced manager — in fact, I don’t believe anybody in the HR function had been trained. Unfortunately, not only did she fail to uncover what was really happening, but managed to upset everybody involved by the way she went about interviewing other employees.
I have also seen investigations performed by outside counsel at the direction of the board. But, just because the lawyers had a fine legal pedigree didn’t mean they knew how to conduct investigations or effectively interview individuals. The investigation was miserable, at best, and they reached (in my opinion) the wrong conclusion.
2.       Investigations should be performed with an open mind, without forming any conclusions until the investigation is completed.
One of the things I have learned as an investigator myself (and yes, I am trained in interviewing and investigation techniques, and have performed investigations around the world) is that things often look progressively ‘blacker’ as the investigation progresses. However, as the investigation gets closer to the suspect and he is given the opportunity to provide additional information, what appeared to be ‘black’ may turn out to be innocent.
I advise investigators that their job is not to draw a conclusion. It is to identify the facts and present them to the appropriate management so they can determine whether inappropriate activities have occurred and who is at fault. In some companies, I have seen the determination of whether there has been a breach of the code of conduct to be reserved to the legal function, as it is a legal opinion.
This means that investigators should conduct interviews in a way that shows respect for every interviewee, as well as respects their rights. By the way, this can be hard for investigators who are formerly members of the police force — requiring special attention and training from their manager.
A few years ago, I joined a global company whose Asia-Pacific operations had just been subject to a massive investigation. A team with participation from an external auditing firm and internal audit staff had swept through the region, leaving operational disaster in their wake. Although they had in fact identified financial reporting fraud by a number of country managers and their controllers (who were fired), the way they had conducted the interviews and investigations (such as seizing the laptops of innocent and guilty alike, and conveying the impression that they knew that fraud would be found) had destroyed the morale of surviving employees — even in countries where no misdeeds were identified. In the year following the investigations, turnover among key sales, financial, and executive positions was above 30%. Sales declined dramatically.
3.       Investigations should be adequately resourced
Effective investigations need:
·         Sufficient staffing, including the use of specialists (for example, for the forensic examination of hard drives);
·         The tools necessary to do the job, such as software for data mining;
·         Space. The location used to perform interviews and interrogations can be critical. Selection of an appropriate space to interview an individual can be the difference between success and failure;
·         Time. Some investigations can take an extended amount of time to complete, and patience from both the investigator and management is critical. It is important to recognize that sometimes it is necessary to pause an investigation due to insufficient information, only to resume it when additional and necessary information is obtained;, and
·         Support from management. While I prefer not to involve (or even inform) senior management if at all possible, sometimes you need their support to get people into the office so you can interview them, obtain access to the laptops, etc. Management needs to be trained so that they not only support the investigation, but don’t over-react in any way (such as assuming the guilt of any employee)
4.       Investigations should be performed at the direction of counsel, but managed by individuals trained in performing investigations
Just because investigations are conducted at direction of counsel (to ensure privilege, etc.) doesn’t mean that counsel should determine the how of an investigation. They should leave that to trained professionals and just obtain assurance that the investigation is meeting their needs, and complying with all legal requirements (such as evidence-gathering and protecting the rights of those interviewed).

There is more. However, these are the main principles.

What would you add to the above? Do you have any stories to share?

Posted on Mar 14, 2011 by Norman Marks

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  1. Adding few more thoughts on the same -

    a. Ground Work done by investigator i.e. Utmost important to understand the circumstances leading to incident and suspecion, Gathering adquate information on the background, lifestyle and other complete personal and professional profile of stakeholders involved as well as suspect/s is very critical for a successful investigation.

    b. Investigation Techniques employed by the investigator during the process of investigation

    c. Interogation / Interview Techniques employed by the investigator during the process of discussing with Suspects so that they do not feel that they are being supspected but at the same time get all the facts necessary to draw conclusions.



  1. I couldn’t agree more. Racing through an investigation only to come to the wrong conclusion is just as bad as not conducting an investigation at all because nothing is resolved. If anything, more problems are created. Something I would add to the list would be determining the credibility of those you interview during an investigation. The EEOC put together a great resource, which I’ve written about in the blog post Investigation Interview Questions to Determine Credibility.

    As you mentioned, investigators need to perform investigations with an open mind and shouldn’t have any bias in the case. However, witnesses and the people involved in the incident might have a reason to support one side over the other. Investigators need to identify any relationship witnesses may have to the complainant or the subject and determine if there’s any reason for them to make false statements. When it comes to getting the facts about an incident, it’s important to know when someone is lying to you, because you could risk making the wrong decisions because of the false information you’ve been given.
  1. Agree with the above statements but would like to add:

    - the very simple concept "Innocent until proven guilty".

    - Confidentality is key.

    - Have some one that is independent and skilled (as previously mentioned). I prefer to get an outside party  - to remove any bias.


  1.  Norman:

    Good commentary. Some additional thoughts

    Having a good investigation protocol in place so that everyone knows what they are supposed to be

    Working as a team- because you may have legal, HR, internal audit, security and other parties on this

    Lastly- root cause analysis- I have seen many investigations completed which for one reason or another did not have enough root cause analysis. As a result,  the necessary internal control changes that needed to be made, did not get made. What ended up being addressed, was the symptom of the problem and not the real problem.

  1. I agree investigations as well as audits should be performed by experienced auditors/investigators. I strongly believe there place for training or obtaining experience but performing a investigation solo is definitely not one.


    thank you. 

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