Internal investigation – when the crisis hits
It is crucial for an organisation’s credibility that suspected incidents and corruption violations are taken seriously and investigated. Action needs to be taken as a matter of urgency after a report has been received through a whistleblowing system, for example.
Often, an internal investigation needs to be conducted in order to find out what happened. Appropriate action can then be taken based on the results of the investigation. In a best-case scenario, there is a plan for internal investigation and crisis management already in place. If there is no such plan, it is still important to take carefully thought-out action without losing momentum.
The way in which suspected irregularities are handled may also be important in any future criminal investigations. US and UK authorities in particular attach great importance to how organisations deal with these. Prompt, appropriate action can mean that a company avoids sanctions or has them considerably reduced.
Our specialists ensure accurate, independent investigations
Lindahl has extensive experience of assisting clients with suspected irregularities. Lindahl’s full-service offering allows you access to the combined expertise of the entire firm, which includes all areas of business law. We can therefore quickly put together a team that is able to deal with all matters that often arise in an investigation such as employment law, tax law and data protection.
In addition, we collaborate with any additional expertise that may be needed. Examples of this include crisis communication and forensic services. In cross-border cases or cases that involve foreign legislation, we have a well established network of leading business law firms around the world.
Read more about Compliance & Risk and Anti-Corruption or contact an expert in internal investigations.
How is an internal investigation conducted?
1.
The first step is to define the scope of and framework for the investigation. The framework must not be too narrow, though it is important to set specific boundaries. Otherwise, the investigation risks losing focus and spreading in different directions without moving forward.
The scope may need to be adjusted during the course of the investigation and it is important to be aware of the importance of flexibility in that regard. It is also necessary to clarify who is responsible for the investigation and the composition of the investigation team at the initial stage.
It is necessary to ensure that the person responsible is independent with a separate mandate and that he or she is unconnected to whatever the investigation relates to and has a great deal of integrity. An analysis should also be carried out at this point on whether there is any reason to use external counsel to ensure legal confidentiality.
Furthermore, relevant key persons for the investigation should be identified at this initial stage. This applies to the person or persons who are suspected of having committed errors and other persons who may possess specific knowledge or information of importance to the investigation. The circle of key persons may also need to be revised during the course of the investigation.
2.
The second step is to draw up a clear plan for conducting the investigation. Part of this step is to evaluate relevant legislation and its importance. Typical examples include rules on processing personal data and labour law. Substantive laws that may become applicable if the investigation reveals that irregularities have occurred also need to be identified.
If the investigation relates to international circumstances, a corresponding analysis needs to be carried out for foreign legislation. It is also important to clearly establish at this stage whether there are obligations or incentives to self-report any irregularities detected to the relevant authorities.
3.
The third step consists of the actual gathering of facts or, in other words, the actual conduct of the investigation. IT forensic technicians may need to be involved in this.
It can be tempting to start with interviews immediately. However, they should be preceded by collection of documents and securing of relevant materials. Otherwise, there is a risk of evidence being destroyed or distorted and also that information required in order to ask relevant questions may be missing.
Interviews need to be carefully planned. Questions that need to be answered at the planning stage include the order in which the interviews should be carried out, where they should take place, who should be present and whether or not interviews should take place with a promise of confidentiality.
4.
The fourth step is to compile the results of the investigation. This is often done by means of a report. The report can be designed in different ways, depending on the nature and purpose of the investigation.
A written report that may be published is important in some cases. In other cases, it is more appropriate to issue a more limited written report or documentation in combination with more extensive verbal reports.
Regardless of the form, the report must contain a conclusion and recommendations for possible action, both against individuals and for the organisation.
Who will conduct the investigation?
Smaller investigations can often be conducted internally. However, the resources for the investigation are insufficient on some occasions. In other cases, the nature of the case may be particularly sensitive, for example when the investigation relates to a suspected criminal offence. In those cases, there is reason to use external, independent investigative resources.
Regardless of whether the investigation is conducted using internal or external resources, it is crucial for the credibility of the investigation that it should be conducted independently and objectively. The framework for the investigation and the investigator’s position in relation to the client must therefore be clear from the start.
Furthermore, the investigation needs to be structured so that information can be collected efficiently and discreetly without jeopardising security. For example, forensic tools may be needed to go through materials. Using external investigative resources can also be important in order to ensure that persons providing information and others involved in the investigation have confidence in the process.
As a law firm, we can guarantee legal confidentiality, which can be an important factor when it comes to sensitive investigations or suspected criminal offences.
