Ethics and compliance professionals may sometimes be required to conduct an investigation involving an external partner. These partners might include a customer, supplier, contract house, governmental agency, and others. We’ll explore some unique aspects of these investigations to consider while you are planning, conducting, and reporting on your work.
Relationships
Ethics and compliance professionals typically have open access to all employees and most areas within their business or organization. Building relationships when something isn’t going wrong can demonstrate your value as an adviser and may pay dividends down the road when internal or external cooperation is necessary. One of the main elements to being effective in enlisting support is understanding your organizational structure and who does what. Ethics and compliance professionals should understand who the key forward-facing people are in their organization. Who are the chief business development or program management people dealing with major customers regularly? Who are the supply chain points of contact who maintain relationships with main suppliers? Is there an individual or group responsible for community engagement?
Understanding the answers to these questions can be critical in a crisis situation where working with an external partner is necessary. A few examples of when these relationships become important include when an employee within your organization is alleged to have committed misconduct at a customer or supplier facility, when a third-party employee has committed misconduct against one of your employees or in your facility, or perhaps if there is an emergency in your facility where outside personnel such as paramedics or police are called in.
Establishing those relationships takes time and must be intentional. Proactively leverage those essential individuals in your organization and discuss the challenges they face when dealing with third parties. Request introductions through previously scheduled status meetings or “meet and greets” while a third party is visiting your facility. Another great example of community partnering is inviting local officials, including fire, police, and emergency personnel, for a tour of your facility. Let them get a good understanding of how your facility is laid out and a general idea of how and where employees work. If there is an accident in your facility, calling in professionals who have knowledge of your facilities might save crucial time in providing emergency services.
Alignment
As you begin to develop your investigation plan, it’s imperative to align your goals with the goals of your external partner. First, you will need to understand the underlying allegation, who the subject of the allegation is, and where the alleged misconduct occurred. Does the allegation involve a violation of company policy? Is there a potential crime involved? Is the subject a company employee or a third-party employee? Did the misconduct occur on company premises or somewhere offsite?
Then you need to engage the proper resources to ensure a thorough investigation is conducted. Before you contact a third party to report an allegation, we recommend alerting internal counsel first. They can provide guidance on potential pitfalls but can also act as a good sounding board for your initial investigation plan. The nature of the allegation will certainly drive the resources necessary to investigate. Internal legal counsel can also determine if the investigation should be conducted under attorney–client privilege. If so, they can help guide involvement with your external partner.
Once you have communicated internally, it is time to contact the external partner. You will undoubtedly have a good understanding of your own available resources, your training, and your team’s core competencies. But what about your external partner? Do they have the time, tools, training, and inclination to participate in a joint investigation? Establishing a relationship prior to the current crisis will pay dividends.
Remember, your common goal should be to ensure the correct outcome of the investigation. This is an excellent time to check your title and your ego at the door to ensure the best results. If the investigation is successful, there will be plenty of credit to go around. You can’t secure a successful outcome at the outset, but you certainly can hamper the investigation by not aligning the proper resources to each task.
Planning
After determining each external partner’s experience level, it’s time to refine your plan and decide who will focus on the investigation’s various aspects. It is crucial to lay out a comprehensive structure, but at the same time, it must also be flexible so the team can adapt to changing circumstances. Typically, you create a list of documents you would like to retrieve and analyze, as well as individuals that you would like to interview. But many times, availability of those interviewees can dictate the order in which you speak to them. Generally, order doesn’t matter until the very end. You should strive to remain flexible and drive the investigation forward expeditiously.
Impress upon your partner that you are fact finders, not necessarily arbiters of possible disciplinary or legal action. Your collective job is to elicit information to help determine what occurred. You should work just as hard to disprove an allegation as you do to prove it. Do your best to leave personal judgments out. Share the outline of your interview questions with your partner and agree on the key themes and questions to be answered. Just as in any interview, it rarely goes exactly as scripted. Discuss this up front with your partner, especially if they don’t have a lot of experience interviewing employees. Make sure you divide the responsibilities (interviewer, observer/notetaker) beforehand so big items aren’t missed during the interview. By having an observer, you can ensure that all major topics are covered in the interview, even if it’s not in the order you planned.
Other vital considerations in the planning phase include determining possible outcomes if the allegations are substantiated. Will the violation result in termination or other significant disciplinary actions? Is there a financial component to the allegation that might require reimbursement to the company? Will the investigation results need to be communicated to regulatory authorities, the customer, or an inspector general? All of these and more should be considered in the planning phase to give the team time to react at the conclusion.
Ongoing collaboration
As the investigation progresses, it is necessary to establish a regular cadence for status meetings and updates to leadership to ensure that those with a vested interest in the investigation receive timely information. You should determine early in the process the pace that works for you. Depending on the nature of the investigation, your cadence might be daily, weekly, or something in between. Setting agreed-upon times will help ensure communication flow is timely. It is important to remember that with an external partner, you don’t control their schedule, and they likely have other business responsibilities or priorities that you may not be aware of. Regular communication ensures that new developments and emerging themes are discussed at the appropriate time, and information that needs to be communicated outside the investigation group is done when necessary. A common goal should be to avoid surprises.
Experienced investigators understand that evidence needs to be collected, interviews must be conducted, and thoughtful analysis needs to occur to reach conclusions in any investigation. Less experienced partners may want to rush to judgment based on preliminary information. Collaborate and communicate with your partner and transfer some of your knowledge and experience to them in the process. This will help them develop their skills for future investigations. Also, make sure you discuss the need for discretion and confidentiality. Ensure that only the people with a need to know are aware of the investigation, as well as the essential information derived from it.
Post investigation
Once the investigation is concluded, there may be multiple reporting requirements. Your planning should have determined everyone that needs to be notified of the results and whether the allegations are substantiated. But if they are substantiated, does that trigger additional notifications? You should determine if human resources, leadership, or the relationship point of contact should be notified. Do you have a responsibility to notify the reporting party or any witnesses? Each situation is different, and you should agree with your external partner on these issues before communicating the results. Make sure you agree on the messages you convey and how much information you provide to the various parties. This is not a time to go off script and let everyone know everything that was discovered.
Another consideration is whether the substantiated allegation needs to be reported to affected parties, such as the customer, a supplier, or a regulatory authority. You should agree with your external partner on who will make these notifications and when. You should also determine whether the investigation identified the need for enhanced internal controls, process revisions, more focused supervision, or additional training. Even with unsubstantiated allegations, enhanced processes and procedures are often identified and can be a valuable outcome of an investigation.
Conclusion
Conducting a joint investigation with an external business partner can be both a challenging and rewarding experience. Establishing relationships before you need to collaborate can ensure a smoother process. Flexibility in planning and investigating—as well as timely communication to interested parties—can identify emerging issues and help investigators to focus on the end results.
Takeaways
-
Building relationships with external business partners prior to an investigation can help make an investigation more efficient.
-
Confirm that goals and resources are aligned with the participants’ skills to ensure the correct outcomes are reached.
-
Plan your investigation for flexibility. Situations can change quickly, and a flexible plan will ensure items are addressed comprehensively.
-
Establish a regular communication cadence with your partner, recognizing possible conflicting priorities outside the investigation.
-
Use discretion but communicate the investigation results to affected parties and report those results timely.