Internal investigation of alleged corporate misconduct

What is the best practice for managing whistleblowing reports? In this guest post, Tove Tullberg from the law firm Vinge in Stockholm, Sweden, will discuss how to properly perform an internal investigation of alleged corporate misconduct.

With a total of 500 colleagues at their offices in Stockholm, Gothenburg, Malmö, Helsingborg and Brussels, Vinge is a full-service law firm with leading expertise within all areas of business law.

The internal investigation

Whistleblowing channels offer the opportunity for internal investigation and resolution of sensitive issues. They can increase the effectiveness and impact of ethics codes and other compliance policies by institutionalising the process employees and others can use to share their suspicions of misconduct. It is, however, important that your organisation does not only implement a whistleblowing channel but also ensures that there are routines and procedures for handling the reports submitted through the whistleblowing system.

If your organisation receives a whistleblowing report, an internal investigation should be initiated to establish whether the allegations made in the report are accurate or what is otherwise the true course of events. In order to answer that question, we often need details concerning, for example, the suspected conduct, the evidence showing which person or persons that were involved as well as when, where, and how the alleged conduct took place. We thus ask the following questions:

• What?
• Who?
• When?
• Where?
• How?
• Why?

We collect and analyse various types of evidence; often in the form of documents, financial information, the contents of e-mails/work phones and information received through interviews. Since there are certain time limits to comply with, the investigative work must be performed efficiently, especially within employment law.

The result of the internal investigation

The result of the investigation and the evidence which has been collected during the course thereof will constitute the basis for various assessments and decisions. For example, whether there are grounds for dismissal and/or whether a police report should be filed. The knowledge and insight gained during the investigation may also be used to implement preventative compliance measures. The evidence might also be used in potential subsequent civil proceedings. Thus, an investigation is intended to obtain supporting documentation to ensure informed and well-founded decisions.

Below are five central elements governing the performance of an internal investigation:

1. Independence and objectivity

The starting point for all investigative work is that the investigative function has the mandate to take independent decisions. In addition, all individuals who are responsible for, and who perform, the investigation must be impartial. Impartial means that no investigator is affected by any desire to either exonerate or convict, but that it is the evidence which constitutes the basis for any assessments or decisions. Ensuring that no one in the investigation team is subject to conflicts of interest is thus pertinent.

2. Guilt of organisation

When you receive a whistleblowing report concerning suspected misconduct – assess whether the alleged misconduct is directed towards the organisation or not. Is the organisation at fault, or is the organisation sounding the alarm on an issue? The conclusion will provide guidance on how to proceed with the internal investigation.  

3. Evidence and evaluation of evidence

Different types of evidence have different purposes (e.g., oral statements are typically deemed to be less convincing than forensic evidence). In addition, evidence can lose value if it is handled in the wrong way. One example is that the investigator examines a live computer instead of working with a copy, and thereby changes the contents of the live computer.

The result of the internal investigation may constitute the basis for different types of subsequent proceedings with different evidential requirements. During the investigation, the evidence needs to be carefully evaluated to assess whether the strength of the evidence is sufficient for the proceedings which may become relevant in the individual case.

4. Documentation

Ideally, each investigative measure should be documented. This is to ensure that after a few years – perhaps when it is time for arbitration – it is easy to find answers to questions such as:” what was the purpose of …” and “what was the reason for …”.  There are, however, different investigative measures which by necessity must be documented well. This includes:

• Investigations of premises and other locations
• The handling and storage of evidence (e.g., certain equipment and documents)
• Meetings and interviews

In order to preserve the validity of the evidence, the investigator must ensure that he or she could testify in the future on where, when, how, and from whom the evidence was collected.

5. Reporting

How the results of the internal investigation should be presented depends on the specific case and how the findings will be used. Occasionally, there are reasons to write several reports. For example, one for employment law measures, one which constitutes the basis for civil proceedings, and one identifying deficiencies of the current compliance program. It is crucial that the correct decisionmaker receives the relevant information, that the answers to the specific questions are reported clearly, and that it is evident how (and based on what evidence) the investigator has arrived at the results.

About Vinge:

Vinge’s Employment & Corporate Crime team has specialists with considerable experience in the area of financial and other misconduct as well as internal investigations. We have team members with a background from the Swedish Economic Crimes Authority, the National Anti-Corruption Unit, and the United Nations’ internal investigations body. A larger and more complex incident often requires legal expertise within several legal areas. When you meet us in connection with an incident which has either been discovered or is suspected, you have the entire competence of the firm available, to be able to quickly identify what measures that need to be taken.

About the author:

Tove Tullberg work as a compliance specialist in Vinge’s Employment & Corporate Crime group and has extensive experience in providing advice to clients in relation to investigations into allegations of misconduct following, for example, whistleblowing reports or negative media coverage. Tove Tullberg also assists clients in designing and implementing policies and training relating to anti-corruption, sanctions and whistleblowing, among others.

Contact: tove.tullberg@vinge.se

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