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Whether a business is large, medium or small in size, internal investigations have become a growing fact of business life. Since so much is at stake, most importantly the reputation of an enterprise or organization, this dreaded path should be traversed with caution. With increases in employee misconduct, financial mismanagement and auditing irregularities, internal investigations are something that cannot be avoided at any cost. Hence, enterprises and organizations must put in place an effective mechanism to report misconduct or irregularities. However, this alone won’t guarantee a fair investigation unless and until the enterprise or organization are not only aware of the common mistakes that might crop up during an investigation but also take effective electronic discovery measures to avoid them completely. Here are some of the common mistakes that are bound to occur during internal investigations that could ruin its very credibility.

·      Proper Reporting System
First and foremost is the implementation of a proper mechanism that makes it easy for employees to notify the management of any misconduct or irregularities. The entire company should be aware of the process of making a complaint and the company’s policies on managing complaints. It must be ensured that the whistleblower or the person who makes the complaint is able to submit their concerns and suspicions confidentially and anonymously.

·        Prompt Investigation
Once a complaint is lodged by an employee, steps should be taken to start the investigation without any delay. If the investigation is not started promptly, it could snowball into a larger issue and even end up in court. During the trial, any hesitation on the part of the company in starting the investigation would be seen as negative and could mean huge penalties and sanctions.

·         Experienced and Neutral Counsel
Most often companies use the services of in-house counsel or regular outside counsel for internal investigations. However, since the inside or regular outside counsel are known to the management and the employees, there is always a chance that the investigation could be biased. And even if it was was not biased, the investigation would still not be considered fair by auditors, regulators, or the courts. Hence, it is always advisable to use experienced and neutral counsel.

·    ‘Punishing’ the Complainant
Often a whistleblower is transferred or put on paid leave by their employer. Though some do this with the good intention of avoiding any kind of confrontation between the involved parties, it could also jeopardize the company’s reputation if the case ends up in court. Since Whistleblower Protection under the Sarbanes-Oxley Act deals with employee protection, any action taken against the whistleblower would be dealt with strictly. Therefore, discuss it with the complainant before making any decisions.

·       Collating Evidence
Before starting the investigation ensure that all business records pertaining to the complaint are properly collected and preserved. Otherwise, there is every chance of it being destroyed intentionally or unintentionally. Moreover, if the necessary information were not preserved, then it would show the company in a poor light if the case does end up in court.

These are some of the mistakes to be avoided while conducting a corporate investigation. Whatever the outcome, the management must make sure that all reasonable efforts have been made to make the internal investigation as fair as possible.