Instances of misconduct are widespread in today’s business world – be they financial or behavioural, be they related to the company or other employees. The question arises whether an investigation into the alleged misconduct needs to take place, and if so, who should be the one to conduct.
According to studies carried out in 2021 by EQS Group1 and published on Statista2, approximately 1 in 5 companies surveyed in Switzerland, the UK, Germany and France experiences a loss of more than EUR 10,000 annually from employee misconduct. The International Labour Organization has noted3 that 1 in 20 workers is the subject of bullying and harassment, such acts are still rampant across all markets.
Duty to conduct an investigation
The underreporting of crimes witnessed is one problem that proves difficult to fully rectify, even with proper reporting channels that are guaranteed to offer confidentiality and anonymity. However, another problem is how to handle complaints and allegations that are reported.
In Switzerland, there is a duty for employers4 to conduct an investigation if faced with allegations of an individual’s personality rights being violated, governed by employment law. Whether the matter remains within Human Resources or escalates to an internal investigations/compliance team depends on the constellation of the company and how many resources are available to it.
Up- and downsides of internally led investigations
The appeal of utilizing the company’s own resources includes the flexibility and speed with which such an investigation can be initiated, the lower cost of not having to engage external individuals, and the already present knowledge on the composition of the company and its employees. Understanding the internal politics and the composition of a company can be valuable in determining the likelihood and context surrounding events reported.
Disadvantages to an internally led investigation can also exist if the individuals are not experienced enough to carry out the investigation in a way that avoids litigation by the other party, or the resources are simply insufficient for the size of the operation. Most notable is the risk of perceived lack of impartiality if one suspects that the internal investigations team either wishes to uphold the company’s reputation or is too familiar with the subject of the investigation, leading to a predetermined outcome in favor of the company/subject.
Ironically, the act of protecting a company’s or subject’s reputation could ultimately lead to reputational damage if this is uncovered by external/unrelated parties. Confidence in the transparency and credibility of the company is lost, leading to employee turnover and/or legal consequences.
External specialists for unbiased and safe operations
To avoid such potential conflicts of interest and to guarantee a transparent and impartial fact-finding investigation, external forensic experts are recommended. There is limited litigation risk and a higher likelihood that guilty parties are identified and held accountable. The investigators can dedicate their resources entirely to the case in question and carry out a robust collection of evidence. A fair and just system is in place if it ensures that both sides are heard, all statements are noted and the decision of whether an allegation is substantiated or not is based on findings that point in a certain direction beyond a reasonable doubt.
This could serve to further incentivize whistleblowers to come forward if they feel they are not only legally protected from retaliation, but that the misconduct will also be effectively addressed.
Furthermore, the additional cost of onboarding external experts to a case could potentially be less than the costs an internal investigations team may incur in court through facing litigation due to lack of experience that leads to errors. Altogether, forensic experts come unbiased, with experience, and with full utility to perform a fair but thorough investigation.
Important: early response AND impartial investigations
That said, there is no doubt that internal investigation teams can act promptly and contribute to an early resolution of potential harm that has occurred or is ongoing towards another individual or the company itself. Nevertheless, the bias that accompanies someone investigating their own place of work and fellow colleagues can be detrimental in the pursuit of an impartial verdict. Hence why external forensic experts are a safe and valuable resource to support investigations into misconduct occurring in a work-related context. The risk of litigation and any potential for bias are significantly reduced when onboarding individuals with experience, skills and resources as well as an emotional distance from subjects and witnesses.