The Impact of Workplace Investigations on Corporate Culture and Vice Versa

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Evangeline Clark
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Presented on November 15, 2016 Copyright

Today s Presenter Andrew Foose Vice President, Advisory Services,

3 Agenda The Role of Organizational Justice in Sustaining a Culture of Integrity 5 Common Investigation Missteps that Undermine Culture How a Poor Organizational Culture Can Undermine Investigations Key Takeaways Q&A Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 2

Organizational Justice & Sustaining a Culture of

5 Organizational Justice and its Effect on Culture Employee perceptions about organizational justice explain the vast majority of their perceptions about the ethical culture of their company Addressing organizational justice is the most effective way to impact ethical culture - Corporate Executive Board Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 4

Organizational Justice and its Effect on Culture Effective investigations demonstrate that the organization is committed to enforcing its policies and procedures Poor,

6 Organizational Justice and its Effect on Culture Effective investigations demonstrate that the organization is committed to enforcing its policies and procedures Poor, slow or biased investigations undermine employee trust and suggest that business integrity is not a high priority Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 5

5 Common Investigation Missteps that Undermine Culture

8 Common Misstep #1 Waiting Too Long to Respond to a Report Delay in starting an investigation can be interpreted as indifference or even hostility to a reported issue Even small issues may be important to the reporter Lack of response may lead a reporter to blow the whistle externally (to a government agency or media outlet) Plus, delay may mean that valuable evidence may be destroyed On purpose As a matter of standard process (e.g., security video footage) Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 7

Another Significant Case Closure Time Increase Source: NAVEX Global 2016 Ethics and

Common Misstep #1 Waiting Too Long to Respond to a Report Contributing factors: Insufficient resources Unclear policies/procedures Case review and assignment No requirement for prompt action Fighting

10 Common Misstep #1 Waiting Too Long to Respond to a Report Contributing factors: Insufficient resources Unclear policies/procedures Case review and assignment No requirement for prompt action Fighting about who owns a report (HR, Legal, E&C, Audit, etc.) Investigation protocols Inadequate tools Multiple tracking tools, points of responsibility Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 9

11 Common Misstep #1 Waiting Too Long to Respond to a Report Corrective actions/prevention: Advocate for additional resources Explain the risk, share data on time to open/close investigations Establish clear procedures Case review and assignment who owns what Investigation protocols require prompt action (specific number of days) Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 10

12 Common Misstep #1 Waiting Too Long to Respond to a Report Corrective actions/prevention (cont d): Use case management tools to track all investigations, not just those triggered by a report to the hotline Analyze data By investigator By issue type By location or business unit Central responsibility or regular meetings among responsible functions Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 11

Common Misstep #2 Getting Attorneys Involved in Every Investigation Contributing Factors: Excessive concern about liability and/or legal privilege Lack of trust of others to be

13 Common Misstep #2 Getting Attorneys Involved in Every Investigation Contributing Factors: Excessive concern about liability and/or legal privilege Lack of trust of others to be competent Downsides: Effect on atmosphere in interviews Formality can undermine ability to obtain evidence Perceived bias Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 12

14 Common Misstep #2 Getting Attorneys Involved in Every Investigation Corrective actions/prevention: Thorough training of investigators Investigation protocols Triage and assignment (assign appropriate investigations to other functional areas) Steps in investigation (clear guidance for investigators) Recognize the opportunity cost of having attorneys conduct investigations Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 13

15 Common Misstep #3 Conducting Poor Investigations Common weaknesses Insufficient evidence gathered Reluctance to assess witness credibility Too high of a standard of proof Inadequate investigative report Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 14

16 Common Misstep #3 Conducting Poor Investigations Contributing Factors: Bias/lack of neutrality Insufficient training Insufficient planning Inadequate guidance for investigators Overburdened investigators Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 15

17 Common Misstep #3 Conducting Poor Investigations Effects: Loss of trust in the investigative process Reluctance to be completely forthcoming during interviews Reduced reporting of concerns Cynicism Sense that speaking up won t make a difference Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 16

18 Common Misstep #3 Conducting Poor Investigations Corrective actions/prevention: In-depth training Including emphasis on neutrality Investigation protocols/manual Reiterate neutrality as part of interview preamble Help the witness understand that process is fair, that no conclusions have been reached Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 17

Common Misstep #4 Organizational Justice Not Consistently Applied Effects: Employees perceive different rules for different people Cynicism Sense that speaking up won t make a

19 Common Misstep #4 Organizational Justice Not Consistently Applied Effects: Employees perceive different rules for different people Cynicism Sense that speaking up won t make a difference Overall sense of unfairness, lack of integrity Employees rationalize their own questionable behaviors Best employees leave Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 18

20 Common Misstep #4 Organizational Justice Not Consistently Applied Contributing Factors: Business pressures Rationalization by leaders Lack of true commitment to integrity Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 19

21 Common Misstep #5 Failure to communicate outcomes Effects: Reporter may believe that nothing was done Reporter tells others that system does not work, resulting in reduced reporting Risk of external whistleblowing Employee population unaware that issues are addressed View organizational values and ethics and compliance as superficial Actions are most important and employees don t see any Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 20

Common Misstep #5 Failure to communicate outcomes Contributing factors: Risk adversity, tradition Desire not to embarrass the wrongdoer Examples of

22 Common Misstep #5 Failure to communicate outcomes Contributing factors: Risk adversity, tradition Desire not to embarrass the wrongdoer Examples of organization-wide communications: Periodic newsletters Awards for ethical behavior Leadership communications Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 21

How a Poor Organizational Culture Can Undermine

24 Effect of Poor Culture on Investigations Witnesses reluctant to share information Fear of retaliation/consequences Risk not viewed as worth it witness believes if nothing will be done Intimidation of witnesses through formality of process Especially risk with in-house attorneys Interference with process Destruction of evidence Attempts by senior leaders to influence outcome Inappropriate discipline Special treatment for those important to business Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 23

25 Key Takeaways Investigations of potential wrongdoing are integral to creating and sustaining a strong culture of business integrity Slow, poor, or biased investigations undermine employee confidence and disincentivize reporting concerns Unequal treatment of wrongdoers and/or the failure to communicate at least basic result details frequently leads to cynicism Fear of retaliation and employee cynicism can make it significantly harder to obtain evidence Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 24

26 What s Next on the Schedule? Enjoy a 30-minute break! See NAVEX Global solutions in action and live-chat with booth staff in the Solutions Hall Participate in topical forums in the Networking Lounge Download assets in the Resource Library Explore more about our Industry Partners During the break, join a special Scheduled Chat with FCPA & Corruption expert, Michael Volkov in the Networking Lounge! Don t miss our Closing Keynote at 1:30pm PT / 4:30pm ET The Business Case for Compliance: How Ethics Pays Timothy Erblich, CEO, Ethisphere Copyright 2016NAVEXGlobal,Inc. AllRightsReserved. Page 25