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Workplace Investigations

Background on Workplace Investigations

The need for organizations to mount effective internal investigations has grown exponentially in recent years. New laws like Sarbanes-Oxley, judicial expansion of the definition of retaliation and employers’ obligations to prevent and correct it, as well as new protections for whistle-blowers, have changed the nature and importance of internal investigations. New media and public interest in corporate governance matters has also substantially raised expectations about what entities like the Board of Directors should do (and how they should do it) to obtain accurate, reliable information in connection with important decision-making like executive compensation or terminations. Most recently, revisions in Chapter 8 of the Federal Sentencing Guidelines have further emphasized the responsibilities of organizations to monitor and report compliance violations proactively. The growth of judicial scrutiny and the ever-increasing size of jury verdicts have also made effective fact-finding and analysis mandatory in many litigation contexts. These particularly include claims for harassment, discrimination and retaliation, as well as certain shareholder lawsuits.

In short, regulators, prosecutors, lawyers, judges, juries, shareholders, consumers and the general public, not to mention the news media, are all now willing—and certainly very ready—to second guess corporate decision-making, the information upon which it relies, and the way in which the information was obtained. As a result, an organization’s ability to gather adequate, accurate, objective and truly factual information—and to do so promptly, fairly, and ethically—has become critical to business success.

First among these is the difficulty of recruiting and deploying investigators with the requisite type and level of skills. Investigations now require investigators who have a high degree of analytical ability, good judgment, and integrity, but also a substantial amount of softer skills or “emotional intelligence.” To be genuinely effective, the “new” investigators must be persistent and tough-minded, but also personable, fair, and capable of obtaining candid, often sensitive information from many different types of people. They must also be able to accurately assess a wide range of human behaviors and communication styles. As investigators are increasingly called upon to deal with the media or appear as witnesses in regulatory or court proceedings, they must also be extremely articulate and precise, but also able to communicate easily and credibly at a variety of levels.

Investigators must also possess significant ability to apply abstract and complicated concepts—like what is or isn’t “ethical conduct” or what is or isn’t an “invasion of privacy” in the modern workplace. Many investigations also require specialized business and legal knowledge. Others demand that investigators not only be impartial and independent, but that they can also deliver a persuasive appearance of impartiality and independence to potential after-the-fact criticism of key organizational fact-finding and decision making.

Even today, most organizations can handle routine or lower-level fact finding, and even many investigations, using internal legal, human resources, security, or compliance personnel. For many of the new higher profile or more complicated matters, however, few organizations have the ability to employ sufficient, competent and experienced fact-finders internally or, even if so, to hold them available to perform prompt, thorough internal investigations as and when needed. Moreover, even if an organization is capable of maintaining the requisite qualified in-house investigators, sometimes the circumstances do not permit—or, at least, do not appear to permit—effective, impartial fact-finding from within. This happens, for example, when the person or persons whose conduct is being investigated or whose judgment is being challenged is so highly placed or prominent in the organization or in the public eye that unbiased internal evaluation is, or at least might seem to be, unlikely or impossible.

As a result, most organizations are turning to outside providers for some or all of their more important investigations. Some have gone to private detective and security agencies, others to law or accounting firms, and still others to prominent individuals or blue ribbon panels or task forces. All of these resources offer certain advantages. They also offer a number of disadvantages. Most are, of course, inordinately expensive. To be candid, employing a services firm that hopes to establish an on-going, long-term relationship or to sell other services can also risk opening the door to an unduly extensive project or service relationship. Some outsiders, such as detective or security agency investigators, may also lack sufficient knowledge of key business or legal concepts to be entirely helpful. (“Privacy” is one such concept that springs to mind after Hewlett-Packard’s unfortunate investigation experience.)

Fortunately, as the new type of investigation has developed, so have a new type of investigator and a new type of investigative organization. Management Practices Group is such an organization.

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