AND

Adam B. Schwartz, Partner

Shearman & Sterling

How to Effectively Conduct an Internal Investigation: Key Considerations During a Pandemic

1. The Purpose of an Internal Investigation
   1. Appropriately investigate alleged misconduct by employees, business partners, contractors, customers, and other third parties to:
      • manage risk associated with the conduct (reputational, financial, litigation, other)
      • permit informed decision making by leadership in response
      • evaluate the need for employment action if warranted
      • and implement policy and control improvements to prevent future misconduct
   2. The pandemic does not alleviate a board’s duty to effectively manage and supervise operations – The need to effectively conduct internal investigations continues, perhaps even increases, in the remote working environment.
2. Important Considerations when Addressing Complex Situations
   1. Evaluate the Best Approach to Conduct a Comprehensive Investigation that will withstand scrutiny
      • What is the impetus for the investigation? (whistleblower, employee complaint or comment, regulatory inquiry, filing of litigation, etc.)
      • Should the investigation be conducted by an internal designee or an outside third party (lawyer vs. non-lawyer)?
   2. Identify the Legal and Policy Implications of the Alleged Conduct
      • Does the conduct being investigated violate laws and/or company policy?
      • Does it bring potential reputational risk?
   3. Consider Potential Conflicts of Interest that may arise During the Investigation
      • Are there competing interests that may complicate the investigation?
   4. Determine which Communications may be protected by the Attorney Client Privilege and/or the Work Product Doctrine
      • Has legal action been threatened or is it likely based on the factual circumstances?
3. Keys to Conducting Effective Investigations
   1. Identify an appropriate point of contact to oversee the Review
      • It is helpful to have one person assist the investigators with collecting documents, contacting witnesses, scheduling interviews, etc.
   2. Defining the Scope of the Review
      • Establish a general objective for the investigation
      • Prepare for the possibility that the scope may evolve over the course of the investigation based on information revealed
   3. Develop an Investigative Plan of action to Obtain a Broad Understanding of the Relevant Facts and Surrounding Circumstances
      • It is important to evaluate factual events in context
      • The past events and the culture of a company may be critical when evaluating the situation
      • Initial scoping interviews may be needed with the complainant/whistleblower or uninvolved internal experts
   4. Preserve, Collect and Review all Relevant Documents and Data
      • Identify all potential resources of relevant information
      • Take affirmative steps to preserve and collect information in a discrete manner
      • Establish protocol for reviewing the information in an efficient manner that simultaneously recognizes privacy implications
      • Pandemic/remote working issues:
      • can preservation or collection occur remotely,
      • can personal devices be reviewed pursuant to corporate policy?
      • How do employees continue working if their at home devices (company issued or personal) need to be forensically collected?
   5. Develop a Strategy for Conducting Witness Interviews
      1. Identify individuals with potential relevant knowledge
         • Always better to be over inclusive and to update the list as you proceed with the investigation.
      2. Determine the Order of Witness Interviews
         • Order may be critical in the collection of information
         • Want to avoid witnesses collaborating
      3. Where to Conduct Interviews
         • There are pros and cons to video conference interviews
         • May impact confidentiality because others could be present
         • Trend with witnesses secretly recording conversations
         • Sharing documents requires forethought. Approach may depend on the role of the witness in the investigation
      4. Preparation and Memorialization of Witness Interviews
         • Be knowledgeable about the witness and the role in the situation
         • Safeguarding the privilege
      5. The Dos and Don’ts when Interviewing a Witness
         • Be prepared in advance to respond if the witness refuses the interview or requests separate counsel
         • It is not appropriate to disclose the identity of the complainant and respondent
         • It is not appropriate to disclose the details of the situation
         • It is not appropriate to disclose who else was interviewed or what other witnesses may have shared with the investigators.
         • Ask open ended questions about the general relevant areas
         • Ask questions to illicit information to understand context
         • Explore new areas of potential misconduct that may arise
         • Take detailed notes
         • Request documentation from witnesses relevant to their testimony
         • Instruct witness on the importance of confidentiality of the meeting
   6. Take Affirmative Steps to Maintain Confidentiality
      • Confidentiality is critical to the integrity of the investigative process.
      • Maintaining confidentiality is more difficult right now with so many employees working remotely.
      1. Ways to Preserve Confidentiality
         • Limit the number of people who are made aware of the complaint. (Goes back to keeping the circle small.)
         • Limit the information shared with witnesses (including in writing)
         • Limit the audience to whom the findings of the investigation are shared.
   7. Evaluate the Merits of a Written or Verbal Report
      • Depends on the circumstances (summary vs. detailed report)
      • Consider past practice
      • Is litigation contemplated?
      • Determine whether disciplinary or remedial recommendations will be included in report
   8. Recommendations / Remedial Measures
      • Impose disciplinary action
      • Modify internal policies and procedures to prevent similar misconduct
      • Evaluate whether legal authorities need to be contacted
      • Determine the best method to communicate the results of the investigation to the complainant, respondent and potentially others including the general workforce or public