The Anatomy of a Successful Internal Investigation

Companies regularly face the prospect of conducting internal investigations. Perhaps the ethics and compliance program has identified an irregularity, or a concerned employee has notified his or her supervisor of potential wrongdoing. Worse, the company may have received notice of a regulatory or criminal investigation. The goal of this article is to identify the key drivers of a successful internal investigation and discuss how to address challenges that often come up in these situations.

When to Investigate

Internal investigations can be expensive and time-consuming, so companies should weigh the costs and benefits. Generally, any meaningful attention from the government or notice of employee wrongdoing should trigger an investigation. Effective defense of civil litigation usually benefits from an internal inquiry as well. Investigations help the company: 1) master the relevant facts; 2) identify and address actual or potential wrongdoing; 3) evaluate any related employee disciplinary issues; 4) protect decision-makers who may not have been involved; 5) and document the company’s response to compliance-related challenges for possible future litigation, responses to government inquiries, and evaluation of whether and how the company might resolve a government investigation that appears to have merit. Further, any viable business ethics and compliance program must have a procedure for responding to alleged misconduct.

Having decided to conduct an internal investigation, a company should consider the following:

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