Managing a business is a very personal experience which engenders many emotions conflicting with the investigation of workplace issues. Being aware of the consequences of these emotions can help manage the pace and outcome of the inquiry.
One of the most difficult parts of any investigation is the management of senior executives. The lead investigator must recognize the needs and desires of corporate management when working on any complex fraud or workplace investigation. These needs and desires, no matter how well intended, may destroy or cripple an inquiry before it even begins.
The first decision to be made in any investigation is who should know an investigation is being contemplated or ongoing. Reporting relationships within the organization may dictate who needs to be advised, but if the target of an investigation is a member of senior management the list may need to be supplemented or restricted.
Loose Lips Sink Ships
This World War II advice holds true for the investigation today, as it did for the protection of Allied shipping almost three quarters of century ago. Once a target knows an investigation is contemplated or underway he may attempt to sabotage the inquiry before it does him any harm. Plus, advance knowledge of an investigation may also increase the subject’s resistance to making an admission to investigators during a later interview.
A common problem encountered by investigators is management’s desire to act by committee. Getting more and more people involved creates gridlock and increases the likelihood the investigation will be exposed. In the early stage of the investigation there may only be an unfounded allegation of misconduct, which may or ma y not be true. Exposing the target of the investigation to speculation may damage the individual’s reputation and lead to a lawsuit for defamation or slander.
A team approach is often an effective means of conducting an investigation drawing on the knowledge and skills of those included. Decide who has a need to know, either because of their authority or because of the information that they could provide. Special skills, such as audit or legal knowledge may make certain people a valuable asset to the group. Consider the timing necessary to bring them into the investigation and how much should be revealed when they are involved.
I want it yesterday!
Understandably, we all desire a quick resolution to an allegation of misconduct. However, this is not always possible. High powered executives, used to quick results are often not satisfied by the progress and timetable set by investigators. Executives have business decisions to make and require hard facts upon which to make them. The early stage of an investigation is often frustrating for senior management because it usually raises more questions than it answers.
Management recognizes that timetables are part of any planning process, so the prudent investigator sets reasonable timetables for the development of the case. The timetable should have measurable benchmarks that allow management to assess the progress of the investigation. Often the speed of an investigation is directly related to its’ cost. Businessmen confronted with the increased costs of the investigation will generally opt for an extended time frame, rather than the increased costs.
Call the cops!
The first reaction of many managers is to notify the police when they first suspect a theft or fraud problem. However, including public law enforcement at the onset of the investigation may prove to be an even more frustrating experience for the senior manager. The flow of information and timetable for case resolution is usually totally outside the control of management. Lost, also, is the ability to control news leaks or monitor the pace of the investigation. Police officers have numerous cases that require their time and it is the rare investigation that gets their undivided attention.
There is another issue with bringing in law enforcement. Company investigators may now be viewed as acting as agents of the police and be required to follow police protocols. This could limit their ability to conduct searches of company premises and computers. And if the target was in custody it might require Miranda warnings before an interview could take place.
The scope of the investigation is also outside the control of management once the decision is made to call in public law enforcement. An investigation is an unproductive event in most business environments. Once the control of the investigation is out of management’s hands it may wreak havoc interrupting the flow of day to day business.
Where the investigation is directed may also create business problems. Investigators experienced in business and its’ terminology will be less likely to need management’s help to learn the operation. Experienced company investigators will lessen the likelihood that unnecessary documents will be pulled creating extra work for an already overburdened staff.
Okay, but where is the proof?
Another common problem faced by the investigator is gaining permission to begin an investigation where suspicious circumstances have surfaced. Management is often reluctant to authorize an investigation of a company executive based only on innuendo. The fear of potential litigation may be a root cause of the reluctance or it may be misplaced trust because of a long working relationship.
Regardless of the reasons, the investigator must overcome management’s resistance by offering the benefits of the investigation, both for the company and the target. Much like a sales presentation, the investigator can assess the needs of the organization, management, and the investigation combining them into a comprehensive plan that provides advantages for all. These needs may be related to image, financial or persona l desires of the parties involved. Knowing the personalities, decision making and financial is sues involved will help the investigator develop a strategy that will sell management on a correct course of action.
What will people think?
Many major investigations create images of inept management in the organization. How could this happen if they were paying attention to the business? What will the Board of Directors think? What about vendor confidence? What about our stock price?
All valid questions and concerns voiced by experienced managers. These are objections to buying in to starting the investigation. Fraud is an unfortunate part of business, but a common one none the less. Frauds do not have the excitement of a kidnapping or a murder. Even in very large frauds reported in the press are buried deep in a back section and disappear after only a short time. Name three murders, now three frauds. Which was easier? I would like to kill him! Emotions are often a problem in the early stage of any inquiry. Betrayal, distrust, exaggerations, unfounded beliefs all rear their ugly heads creating emotional difficulties that the lead investigator must manage. Letting the emotions rush decisions or failing to take the appropriate time to develop the case are common derivative problems. The senior executive, who has a Type “A” personality, may want to make an impulsive decision that will have strong implications for the investigation. Knowing the management style of the decision maker will help organize the presentation of the investigation in a manner that focuses on the desired decision.
Selling the Investigation
Clearly, any investigation may have pitfalls as management recognizes the pros and cons of proceeding. The lead investigator is tasked with selling senior executives on the proper course of action as problems arise. Each stage of the inquiry must be presented to management with the logical next progression laid out. It is also the lead investigator’s job to prevent senior management from micro-managing the operation.
Legal advice should be sought when necessary, but t he inquiry should not be run by turning to an attorney every time a simple issue arises. The lea d investigator should make the decision when to use an attorney during the investigation based o n his experience. Using standard methods of investigation commonly accepted, keeping management informed, and being aware of their needs will help the inquiry proceed toward its successful conclusion.
Shane G. Sturman CFI, CPP, and David E. Zulawski CF I, CFE are partners in the training and investigative firm, Wicklander-Zulawski & Associate s, Inc., Downers Grove, IL. Questions and comments welcome. (800) 222-7789.
By Shane G. Sturman, CFI, CPP and David E. Zulawski , CFI, CFE