Inside Job: Internal Investigation for Non-investigators

Life would be a lot easier if people always behaved honestly and ethically. Nevertheless, anyone who has spent any significant amount of time in the corporate crucible can tell you that employee behavior often falls short of the ideal. Such is life.

Internal investigations — whether for financial fraud or some other type of legal, moral or ethical breach — are a workplace reality. Too often, however, those called upon to conduct these investigations are ill-prepared, having come into their positions based on technical knowledge and functional experience, with little or no background or experience in managing a crisis and/or conducting internal investigations.

The need to perform an internal investigation typically comes without warning. It’s not surprising then that most organizations are not able to produce on the spot experts who have the skill sets, tools and experience necessary to perform an internal investigation.

Rather, the staffing of an internal investigation unit is much more likely to consist of “battlefield promotions” — typically, some combination of internal audit, legal, IT and HR leadership.

Considering the risks, both financial and reputational, a little advance planning could mean the difference between an effective outcome and a disaster. Protiviti Managing Director Scott Moritz teamed with Director Peter Grupe to address this important issue in a free webinar last year, Internal Investigations for Non-Investigators.

The webinar streamed live on November 13, 2014 and is archived by date on the Webinars page of the Protiviti website. Scott is a former FBI special agent and global leader of our Investigations & Fraud Risk Management practice. Peter is a director in the Investigations & Fraud Risk Management practice and served 24 years in various executive management roles in the FBI’s largest white-collar crime branch, where, among other things, he managed the Bernard Madoff investigation. Clearly, these guys have been there, done that.

The live broadcast of their webinar drew a large audience and remains one of the most popular on our site. Here are some takeaways from this conversation — actions every organization should take now, before a crisis arises.

  1. Develop an investigation plan. A good plan provides guidance for defining the scope of an investigation, the chain of command, communication protocols, timelines, documentation, deliverables and investigative procedures.
  2. Lay the groundwork in advance. Data preservation is critical — from books and records to email and other electronic data, and includes the ability to recover deleted hard drive contents. Verify the integrity of archived data to ensure that retained records can be retrieved.
  3. Identify external resources. When things go wrong, they can go wrong in a hurry. If your investigation plan calls for retaining outside counsel, public relations consultants or investigative help, make sure those assets have been identified and that those resources can be “on the ground” quickly.
  4. Implement a case management system. When your reputation is on the line, you want to be sure you have your investigative infrastructure in place before you need it. You never want to find yourself building the bridge as you cross it.
  5. Learn from your mistakes. Leveraging the positive and negative results of prior investigations helps organizations compress the learning curve over time, improving investigative efficiency and effectiveness.

Do you have an investigation plan? The heat of battle is no place to be formulating policy. For more information, I highly recommend watching the full webinar. As I said, these guys are good!

Jim DeLoach

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