With increasing public scrutiny over the workplace, companies are now more than ever focused on improving the culture within their organizations.
Watch partner and pensions and employment expert Lisa Talbot talk about the importance of internal investigations.
Every company has its own workplace culture: the character or personality of its organization. Although every workplace culture is unique, certain characteristics of a good environment are universal. An organization which emphasizes the importance of ethical behaviour is vital to developing a positive workplace culture. How is this achieved in practice?
In our experience, conducting timely and thorough internal investigations into allegations of ethical misconduct is critical to fostering a good ethical workplace. Employees who do not believe their concerns will be investigated in good faith will not report misconduct internally. This, in turn, prevents companies from identifying and eradicating bad conduct in the workplace. As a practical matter, it may also result in employees reporting their concerns to external bodies as a first point of contact—for example, securities commissions or employment standards regulators—before the company has had an opportunity to investigate and address the misconduct itself.
Emphasizing the importance of ethical behaviour is vital to developing a positive workplace culture.
Surveys of employees confirm there is a link between whether employees will report ethical misconduct and their perceived effectiveness of the organization’s internal investigation process. A 2018 Ethics at Work survey by the Institute of Business Ethics found approximately 43% of employees who noticed misconduct would not report their concerns. One of the most prominent reasons given by employees in these circumstances was that they did not believe corrective measures would be taken. Of those employees who did file a report, approximately half stated they were not satisfied with the outcome of doing so.1
Similarly, the 2018 Public Service Employee Survey commissioned by the Treasury Board of Canada Secretariat found that while 71% of federal employees knew who to contact when they encountered an ethical situation, only 48% of employees felt they could initiate a formal recourse process without fear of reprisal. Most employees who chose not to file a formal complaint believed filing a complaint would not “make a difference”.2
Developing investigation processes
Considering the link between ethical workplace culture and effective internal investigations, we encourage companies to develop robust internal investigation processes. The most important steps a company can take in this regard are described below.
Review and update existing policies. Most companies have policies (e.g., harassment policies and whistleblower policies) that set out—with varying degrees of specificity—how complaints may be made under the policies and the investigative procedures that will be undertaken in response to such complaints. Employers should review these policies carefully, with a view to ensuring that, among other things, the policies provide an anonymous reporting mechanism; include clear anti-reprisal language; clearly articulate the investigative procedure to be followed (including any mandatory reporting); and clearly articulate the disciplinary measures that may be taken against employees found to have violated the policies. The policies should also encourage (although not require) employees to report their concerns internally before making those reports to external regulators.
Develop an investigation template or checklist. Although investigations can (and should) be tailored to the severity of an allegation, it can nonetheless be helpful to develop an investigation template (or checklist) to ensure that certain basic requirements are being met in every investigation (e.g., reporting on the results of the investigation to both the complainant and respondent).
Provide training to internal investigators. If there are individuals within your organization who are to be tasked with conducting investigations for your organization, they should be provided with training on conducting effective investigations. Ideally, training should cover: the steps in an investigation; issues of confidentiality and privacy; the procedural rights and obligations of investigation participants; making credibility assessments; and writing investigation reports.
Be consistent. It is imperative that all complaints—even those that appear to be trivial or frivolous—be investigated. While investigations can be tailored to the severity of the allegation, a total failure to investigate can quickly perpetuate employee concerns that ethical misconduct is not taken seriously by the organization. It is also important that all employees—regardless of their seniority or role in the organization—are held to the same standards.
Through our experience conducting investigations and advising companies with respect to their own investigations and related policies, we observe that companies who are committed to a robust internal investigation process are better placed to manage and resolve issues that arise in the workplace, resulting in a more positive and productive workplace for its employees. Further, these companies are better placed to address disputes or other issues in a confidential manner (subject to applicable regulatory requirements), thus reducing any potential reputational damage.
1 Guendalina Dondé, “Ethics at Work: 2018 survey of employees, Europe”, Institute of Business Ethics.
2 Treasury Board of Canada Secretariat, 2018 Public Service Employee Survey.