With the discernable changes in the corporate culture within the last decade, internal investigations have gained more and more significance since they provide indispensable and multipurpose tools to companies. Even in countries such as Turkey where there are no existing mechanisms of self-disclosure, internal investigations have become vital in detecting, remedying, and preventing irregularities within companies. To take it one step further, one could clearly argue that the importance of investigations in detecting and addressing wrongdoings might surpass the importance of its use in shielding a company from liability, as the former is clearly more beneficial and sustainable for companies in the long run. While an effective internal investigation might enable a company to identify its potential exposure and take decisions to mitigate potential damages, it also enables it to prevent the continuation of any irregularities and provides the necessary resources and information for taking remedial or disciplinary action against the wrongdoings.
When a serious allegation is made, more often than not companies rush into an investigation, as the matter at hand would usually be highly time-sensitive. However, this quick reaction could often pave the way for skipping crucial steps, missing important details and potentially causing harm in the process. In this regard, an established structure and investigation procedure plays a very important role for an investigation to provide successful and fruitful results. With a strong and consistently applied investigation process in place, companies can respond to allegations in a sufficient and timely manner, avoid any pitfalls which might harm the company, and also strengthen the company's compliance controls as a whole.
For this reason, companies could greatly benefit from developing an effective investigation plan even before an allegation is raised, which should outline the process, cover the steps that might be missed, and ensure that the investigation stays on track. Ultimately, an effective investigation could include the following steps.
- The scope of the investigation should be determined and defined in detail to set the framework in terms of the subjects or issues and allegations which will be investigated, as well as the subjects or issues that will stay outside the scope of the investigation.
- A team should be put together for conducting the investigation. Their oversight, roles and responsibilities must be determined, and the teams or individuals who will be responsible for each type of investigation or performance of each task must be established.
- The timeline of the investigation should be developed and scheduled, which should cover the dates to conduct the investigation, list the tasks and their deadlines.
- The goals, available information sources and all potential information sources/points should be identified, which should also cover the subjects of the investigation and how to collect the necessary and useful information.
- Within the investigation, the need for outside counsel must also be assessed, since the subject matter (allegations) of each investigation may vary and while in-house counsel might suffice in some investigations, the assistance of outside counsel might prove crucial in certain cases.
- The risks of the investigation should be outlined. While designing the investigation framework, the relevant teams must also develop a comprehensive list of facts to identify the company's risk profile and assess the company's potential exposure.
- At the outset of any investigation, if necessary, the company should immediately take the required action to eliminate any risk of an ongoing misconduct which might cause further damage to the company.
After establishing an effective investigation plan, companies should keep in mind certain key points in an internal investigation. One important aspect in investigations is the independence of the investigation. An investigation must be conducted independently, whether conducted by the in-house counsels or outside counsels, in a manner that precludes collusion with the business and other units of the company, especially the ones that are linked to or subjects of the allegations which will be investigated. Another important point is that the investigation must proceed without any doubts or pressure from other units or persons as this would severely interfere and affect the outcome of the investigation. Similarly, an investigation must always stay objective and approach the allegations and matters from an objective standpoint. The purpose of the investigation should never be to prove that a wrongdoing has occurred or not occurred, but rather, to establish the facts to the extent that is available to the investigators. Lastly, as the efficiency of an investigation depends on the information uncovered during the investigation, the investigation team must have access to all the relevant resources and use all available and reasonable sources of information. The team's inability to access and use all available information would clearly hinder the efficiency of the investigation.
As a last point, the investigation team and the company in general, must always proceed by keeping in mind the critical importance of maintaining confidentiality. Confidentiality not only ensures the integrity of the investigation, but it can also prevent retaliatory actions against whistleblowers, tampering with evidence or collusion of potential witnesses before they are interviewed, as well as protect the privacy of the employees involved in the investigation.
This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in June 2021. A link to the full Legal Insight Quarterly may be found here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
