Welcome back to part two of a two-part series on investigations best practices, shared by Mary Shirley. If you missed the first part, you can check it out here and join NAVEX’s Carrie Penman and myself in a webinar on this very topic here.
Now, let’s continue where we left off.
6. Examine incentives, not just behavior
Sometimes it’s not as clear-cut as a bad apple seeking to wreak havoc and be dishonest. Sometimes the company contributes to creating an environment where the pressure is such that colleagues have almost no choice but to cheat to meet their targets. This is known as “perverse incentives”, perhaps most famously highlighted in the case where customer accounts at a large bank were created and incurring charges by clients without consent, said to be due to the organization setting impossible targets to reach.
If you’ve substantiated an allegation, it is worth asking to what extent, if any, the company is responsible for the misconduct occurring. Both root cause analysis and Just Culture considerations mentioned in the first article, can help identify perverse incentives where they exist.
Partnering with business development leadership to share with them how important it is to get the message across that we do not seek to win at all costs can help avoid perverse incentives. Try sharing the above case study at your next compliance management training and seek their commitments and suggestions on how your organization can avoid encouraging behavior that leads colleagues to mistakenly believe that it is worth acting unethically to meet goals.
Pro tip: It’s worth keeping perverse incentives in mind as Ethics and Compliance teams try to improve their KPIs. For example, setting unrealistic case closure times for investigators could result in cases being closed without being properly investigated, just to avoid missing the team’s goal.
7. Measure investigation quality, not just speed
Chief Compliance Officers often report case closure times to management and the board as one of the metrics to highlight. It’s important because resolving substantiated allegations and taking swift action markedly impacts perceptions of the reliability of the speak up program and faith in the Ethics and Compliance department. However, it shouldn’t be the only important factor, and as described above, inappropriate focus on closure times can lead to poor quality investigations – our own homegrown perverse incentives nightmare!
The peer review activity shared in part one of this series helps to promote a conscious effort by investigators to document properly.
Pro tip: Benchmarking your percentage of substantiated cases against the figures in the NAVEX benchmark report can be an indicator as to investigation quality also.
8. Monitor for retaliation after the investigation closes
Oftentimes retaliation for speaking up comes hard and fast. At other times, the retaliator attempts to wait for the storm to blow over, hoping their negative actions won’t be linked to the protected activity. As discussed in part one of this series, that’s a “special” type of retaliation which I refer to as long-term retaliation. The perpetrator plays the long game to try to avoid detection.
For this reason, it’s a good idea to identify a period of, say, two or three years from the close of the investigation, during which Compliance and/or HR will monitor the employee’s progression through the organization. One Chief Compliance Officer I know keeps a hard copy notebook for this purpose.
Pro tip: Agree with HR that proposed terminations be run by Compliance to check against reporters. You may wish to expand this to include highly suspected anonymous reporters.
9. Turn findings into organizational improvement
I ask managers to reframe speaking up from rocking the boat, to a gift to the organization. They’re also a gift to us. My favorite way to use investigation scenarios is to pop them straight into annual training with appropriate sanitizing. You probably do that too.
A less common way to further benefit from an investigation is to improve our own quality of investigations and take an introspective look inwards. Consider applying a standard project post-mortem to the investigation process, treating substantial investigations as projects.
Self-assessment questions for the investigator can include:
- What surprised us?
- What assumptions turned out to be wrong?
- What unintended impact occurred? Positive, negative, neutral
- With the benefit of hindsight, is there anything that I would have done differently?
There are also questions for the benefit of the enterprise that the investigator can ask and answer for management briefings:
- What signals existed before the issue surfaced?
- What did this investigation teach us about how our control system operates under pressure?
- What did our organization systematically misunderstand?
- What made doing the right thing harder than doing the wrong thing?
- What is the earliest point at which an intervention could have materially changed the outcome?
Pro tip: Another worthwhile exercise under this rubric is to track recurring causes vs. specific violations for a broader root-cause analysis. This makes it easier and more objective to see patterns from a bird’s-eye view rather than each investigator’s standard view.
10. Build a culture of consistency
Consistency isn’t just an expectation by Department of Justice in the Evaluation of Corporate Compliance Programs guidance. It is a commitment by our field to do the right thing by our colleagues. Like cases should receive like treatment. It sounds good in theory, but it can be tricky in practice.
One way for organizations to kill feed two birds with one sctone and promote both consistency and transparency, is to draw up a disciplinary matrix. Compliance will need to collaborate with HR and labor counsel to develop this document, and it will be necessary to get buy-in from leadership.
The investigator peer reviews described in part one of this series are another key way to support consistency. Investigators having insight into how their counterparts document and conduct investigations serves as a nudge for best practices to be adopted from one another.
Pro tip: A pre-existing disciplinary matrix makes it easier for the organization to hold “high value” rainmakers and senior leadership accountable with the written document setting out expected ranges of disciplinary action for various tiers of misconduct.
This is but a sample of best practices for investigations. You may have more. Please send the elevator back down to the Ethics and Compliance community and share them in the chat the next time you tune into a NAVEX webinar.
