As opposed to forensic investigations that involve the examination of data systems, internal investigations describes the use of an undercover investigator acting as a employee who observes and reports on the actions and practices of his/her fellow employees and the company. The investigative reports are kept secret within the company and no disclosure is made to others in the company that an internal investigation is (or has been) conducted. Many times internal investigations result from discoveries made by first line supervisors who are documenting the behavior of poor performers but often management is not capable of providing appropriate evidence to justify termination. This may be due to union rules, internal policy, or government regulations on employee/manager relationships.
A first recommendation would be the use of both known CCTV and covert detection systems. As a matter of course, the review of the employee’s email, web activity, and company phone call register should also be examined. Caution is warned, however, that no intrusion is made that may be considered unconstitutional in other circumstances. Also, a company policy on the use and audit of these communication systems is acknowledged by the employee and kept on record well before the examination is performed.
Internal investigations are often the ‘last resort’ for company’s who know they have problems but have little evidence to use against the rouge employee. Internal Investigations are a labor intensive, costly proposition to determine wrongdoing but are often the only means to appropriately identify and terminate the employee who escapes detection from CCTV or other non-intrusive means. The investigator enters into this situation blindly, often not provided with details of who the intended target may be. This serves as a safeguard in case the details of the investigation are brought to light and further adds credence to the investigator’s reports and observations as being unbiased.
Company’s may recognize the need for such an investigation but may have reservations about the cost and the ability to use investigative findings appropriately. Legal counsel is the next step in this equation. Attorneys who specialize in employee/company relations or human resources should be sought for this task. The laws regarding the employment of undercover investigators vary from state to state and the use of an appropriate law firm will recognize the need for a professional investigative firm that is experienced in conducting and selecting investigators correctly. Smaller investigative firms who specialize in internal investigations, who are bonded, and recognize the need for confidentiality, should be sought. Larger security guard companies have been known to employ security guards to act as investigators, which can result in unnecessary disclosure of investigator’s activities. Thereby damaging the company’s reputation and the trust they have with other ‘good’ employees.
Typically, the decision to conduct an internal investigation is made at the highest level in the corporation and is kept secret with only two high-ranking people in the corporation aware of the investigation being conducted. These two positions are normally the CEO or COO and the other as the company’s legal advisor. A controller is assigned who directs the investigator and serves as the investigator’s point of contact on all issues. The controller is also the liaison for the company’s representatives, forwarding daily investigative reports, and advising on the direction of the investigation. Many companies have elected to use an outside legal firm to conduct the internal investigation, further insulating themselves from required disclosure requirements.
As a former Pinkerton’s investigator, I can attest to the value of conducting periodic internal investigations in critical areas. One position was with a Department of Defense supplier who manufactured parts for fighter aircraft. Naturally, quality assurance was a priority but I soon found that many of the practices that I was trained on by the company were not being conducted on the manufacturing floor. Supervisors were strict on the compliance measures…when they were around. Employees had a nonchalant attitude about the condition of the part. Many finished components destined for the multi million dollar aircraft were returned due to my investigation findings and cost the company additional dollars but may have saved millions more if a tragedy occurred. Other investigations at different locations had similar results with identifying internal theft, unsafe working practices, and on the job drug and alcohol use.
Ultimately, the use of the internal investigation is reserved after a careful review on the potential loss versus the expected cost. The profits lost over time may easily justify the use of an investigator but this can only be determined after consulting with an attorney and investigative firm on what can possibly be learned from the investigation. Internal security measures and the recommendations from managers may find resolutions to the potential internal problems. In the end, company executives have another tool in their toolbox to correct their potential for loss and increase profitability.