Internal investigations play an important role in the modern corporate world, providing companies with the opportunity to identify, analyze and respond to possible violations, conflicts of interest and other incidents. These investigations are part of the company’s management process. Investigations not only help companies comply with laws and regulatory requirements, but are also an indispensable tool for maintaining the ethics, honesty and transparency of business processes.
Why it is important to properly conduct an internal investigation
Conducting a proper internal investigation is important for companies for a number of reasons:
Detection of violations
An internal investigation helps to identify any violations or inconsistencies with internal policies, regulations, procedures and legislation. This allows the company to fix the problem and prevent its recurrence.
Reputation protection
A quick and effective investigation helps to preserve the company’s reputation by allowing stakeholders to be convinced that the company is taking the problem seriously.
Compliance with the law
Proper investigation helps the organization comply with all relevant laws and regulations.
Improving efficiency
As a result of the investigation, areas may be identified that require improvement, which may lead to increased efficiency of the company.
Preventing legal consequences
If serious violations are found, the investigation can help the company take measures to avoid possible legal consequences.
Overall, a proper internal investigation helps the company manage risks, improve processes, and maintain the trust of all stakeholders.
Key principles of conducting internal investigations
Internal investigations are based on the principles of:
- Independence;
- Confidentiality;
- Competence and professionalism;
- Objectivity and impartiality;
- Legality.
These principles are contained in a standard issued by the International Organization for Standardization (ISO).
How the internal investigation procedure is organized
Step 1. Development of internal documentation
The company is developing an internal document. This may be an internal investigation policy, standard, or regulation. We recommend that you include in the document:
- Provisions on the support of internal investigations by employees of the company;
- The order of internal investigation procedures;
- Reporting on the results of the investigation;
- The application of remedial measures that led to an internal investigation.
Step 2. Create an “investigation team”
At this stage, you need to select employees who will conduct an internal investigation. The company may have a special employee who is engaged in internal investigations. In addition, he may have the right to involve outside experts for consultations.
Step 3. Preliminary assessment of the situation
An employee or a group of employees assesses the current situation that led to an internal investigation. They evaluate:
- Risks to the company’s finances;
- Risks to the company’s reputation in the market;
- Risks for key persons of the company;
- Risks for the staff.
Step 4. Determining the amount of work
Responsible employees determine the amount of work:
- The circle of employees who need to be called for an interview.
- Questions to ask these employees.
- The media that needs to be checked.
- Hypotheses about the causes and conditions that led to the situation under investigation that need to be checked.
Step 5. Planning an internal investigation
At this stage, responsibilities are distributed among the members of the group that conducts an internal investigation. When a company has a separate employee whose responsibilities include conducting internal investigations, he draws up his own work plan.
At this stage, an interview schedule is drawn up and the timing of the internal investigation is determined.
Step 6. The actual investigation
At this stage:
- Hypotheses are being tested.
- They are collecting evidence.
- They conduct interviews with employees.
- They analyze the results.
Step 7. Completion of the internal investigation
At this stage, reports on the internal investigation are being prepared. If an outside expert was involved in the internal investigation, his conclusion on the issues put to him is studied.
In the report, in particular, you need to define:
- What are the reasons and conditions that led to the situation for which an internal investigation was conducted.
- How critical the investigated situation is for the company’s business processes.
- What risks have been identified for the company as a result of an internal investigation.
- What measures are needed to prevent a repeat of the situation that led to an internal investigation.
- Is it necessary to make changes to business processes, functions and staff? And if required, what is proposed to be done.
What risks await a company that does not conduct internal investigations
Failure to conduct proper internal investigations may result in adverse consequences for the company, such as:
- Deterioration of the effectiveness of the compliance management system.
- The risk of compromising your reputation.
- The inability to identify and suppress offenses.
What risks await a company that improperly conducts internal investigations
- Excessive confidentiality. During inspections, many people find it necessary to hide all their assumptions and “discoveries” until the last moment. Ignoring discussions with management and interested employees can lead not only to mistakes, but also to ineffective preparation for the objections of colleagues, which will inevitably happen during the audit.
- Bureaucratic rigidity. Violating regulations or policies is undesirable in itself, but it is important to see the real picture. It is necessary to delve into the causes of violations, perhaps the right solution can be found here. It is not always necessary to look for the culprits. Your conclusions can be useful even without mentioning specific names. However, in cases of serious damage and losses, failures to prove guilt pose a serious challenge for the inspector and for the company.
- The lack of clear logic and conciseness. It is always necessary to rely on established facts and concisely describe cause-and-effect relationships. It is necessary to avoid long and inconsistent reports, excess of emotions and drama.
How we can be useful for conducting internal investigations
Our employees are experienced specialists in the field of risks and internal audit. We can:
- Advise you on the internal investigation procedure.
- Prepare internal documents for your company on the organization and conduct of internal investigations.
- Audit the existing documents on internal investigations.
- Participate as invited experts in conducting internal investigations.
- Represent your interests in government agencies in connection with an internal investigation.
Contact us
If you have any questions related to internal investigations, we will be happy to help you! Our long-term experience in the field of corporate risks will help you resolve any disputes.
Phone and e-mail communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@ambylegal.by.
