internal investigations: practical challenges and solutions · 2013-06-27 · internal...
TRANSCRIPT
Internal Investigations:Practical Challenges and Solutions
SCCE Compliance and Ethics InstituteSeptember 11, 2006
Frank Sheeder, [email protected]
(214) 969-2900
What We Will Cover
• Stakeholder issues• Dealing with them
• Things that make the government mad
Some Key Stakeholders• Senior leaders• Board of Directors• Counsel and compliance officers• Government representatives• Person who raised the issue• Wrongdoer• Note: There are others in each situation
(Hopefully) Shared Internal Agendas
• Accountability by all key players• High standards for compliance• Ensure credibility• Preserve integrity of the process• Avoid conflicts of interest• Minimize disruption• Identify and resolve issues early• Effective corrective action plans• Maintain privilege
Senior Leaders
• Do the right thing• Protect organization• Determine responsibility• Maintain board
relationships• Control costs• Get past it quickly
• You are going too far• If this gets out, it will hurt
the organization• Deflect responsibility• Protect career/reputation• Keep the board out of this• Too expensive• Disruptive
Board of Directors
• Do the right thing• High-level view• May not have expertise to
evaluate circumstances• Protect organization• Determine responsibility• Maintain personal
reputation
• Look to senior leaders and others for guidance
• Avoid personal liability
Counsel and Compliance Officers
• Do the right thing• Direct involvement• Protect organization• Be objective• Integrity of investigation• Appropriate remedial
steps
• Too conservative• Afraid of unknown• Go too far• CO failure to use privilege• Increase risk to org• Not empowered enough• Avoid personal exposure
Government Representatives
• Make org do the right thing
• Show result for efforts• Make an example• Integrity of investigation• Collect $ and punish org• Gather evidence
• Uninformed about industry
• Overzealous• Jaundiced view• Make marginal cases if
too much invested
Person Who Raised the Issue
• Make org do the right thing
• Concerns fell on deaf ears• Wants to be right• Show result for efforts• Wants to be in the middle
of investigation• May be legally protected
• Distorted view of right thing
• May be wrong• Overzealous• May be disruptive• Unrealistic about
outcomes• Wants financial windfall
Wrongdoer
• Denies culpability• You may or may not
need them or their info• Wants to be in middle
of investigation• Wants legal coverage
• May be culpable• Should be out of the
loop• May be senior in org• May want to fire or
cut off• But: legal protections
Actual Stakeholder Quotes• “I don’t want to be squeaky clean. Just clean enough.”
• “I don’t want to be a poster child for compliance.”
• “I can’t believe he admitted doing that.”
• “Oh, I thought you were against us. Now let me tell you the realstory.”
• “I can’t imagine a situation in which I would admit we’ve done anything wrong.”
• “Your job is to keep [Compliance Officer] out of our facility.”
How to Deal with Stakeholders
• Carefully• Thoughtfully• Intentionally• Honestly• Objectively• But not compromisingly
What Not to Do• Over-promise• Shoot from the hip• Play favorites• Disclose facts• Document things in an unfortunate way• Compromise privilege• Have “off the record” discussions• Let the grapevine get ahead of the
investigation
General Solutions• Regular counsel and consultants may not be
the best choice• Build relationships in non-crisis situations• Understand disconnects between regulatory,
business, and legal matters• Have an “investigation orientation” up front
• Obtain buy-in on the process in advance• Acknowledge and discuss stakeholder
perspectives• Establish the duty and intention
do the right thing
Practical Approaches
• Set expectations• Have a detailed work plan• Who is (not) on the team
• Internal and external resources–Special considerations with consultants
• Point person with empowerment• Establish privileges and protections• Anticipate the endgame• Establish reserves
Setting Expectations
• Get buy-in on the process• This is going to take some time
• Things must be done in a certain order• Process will cost money• May need to exclude people from process• Privileges and protections• Potential outcomes• Potential financial impact
Work Plan• Written, detailed, and thoughtful• Define issues and scope• Document and data gathering and handling• Assign specific accountabilities• Establish and maintain privileges/protections• Set and adhere to deadlines• Include remedial actions• Monitor for effectiveness of remedies• Document why you chose not to do things
Important First Step: Validation
• Even government says it is OK to validate • Too many people rush to judgment
• “Chicken Little” approach• Siege mentality• Rumors and innuendo
• You never end up where you anticipated• Privileges are ignored
Pushback Themes
• Mountain out of a mole hill• Everyone does it• The rules are unclear• Changing will put us out of business• We are an ethical organization• Denial• Rationalization
Dealing with Pushback
• Remind them of buy-in on process• Ask what is the alternative• Front page of newspaper test• Red face test• Go over their head• Third-party validation
Things That Make the Government Mad
• Obstruction of Justice• Lying, evidence destruction, witness
tampering• Lack of candor and partial disclosures• Non-waiver of privilege• Paying for wrongdoers’ attorneys• Lawyer represents everyone• Lack of respect
Questions?