Steps to take when investigating a senior leader

Monday, 01 July 2024

David Steirn photo
David Steirn
Director, Enterprise Investigations Pty Ltd

    “Our board wants to instigate an investigation of one of the senior leaders of the organisation following allegations of misconduct. What steps do we need to take to do this appropriately?” 

    The Stoic philosopher Epictetus said, “It’s not what happens to you, but how you react to it that matters”. While stakeholders do not imagine an incident-free organisation, they do expect a thorough and credible response.

    Interrogate the complaint

    While all complaints should be considered, vague allegations or anonymous disclosures make meaningful investigation impossible. Assess the credibility of the allegations. What happened? When and where did it happen? Who is involved? Is the problem ongoing? Who else knows about it? What remains unknown? On the available information, does this complaint justify further enquiry? You are not determining whether the alleged conduct occurred.

    You’ll now be well-positioned to decide the appropriate next steps. These include briefing external counsel and satisfying your continuing duty to make adequate enquiries about issues with the potential to harm your organisation without relying only on the advice of others.

    Call the experts

    Where the allegations seem credible, involve a senior leader and, if substantiated, would carry risks of serious legal consequences or reputational damage, engage experienced external counsel to advise on an internal investigation. This gives early access to professional privilege over potentially damaging documents and communications generated during the investigation.

    Perception is reality

    Without exception, when investigating a senior leader about a serious matter, the board should consider engaging external counsel and a specialist investigator. While many internal investigation teams are highly competent, there is no way of adequately addressing the cloud of bias that will plague any internal investigation, no matter the measures taken.

    Stakeholders, regulators and aggrieved parties will be far more comfortable when the matter is investigated by an experienced and impartial investigator supported by an experienced law firm. Remember, if it goes public, investigations run in-house attract media interest like flies to honey.

    Choose the right investigator

    Only consider an investigator with extensive experience with matters involving senior staff. Witnesses can be nervous or uncooperative, so high-level interviewing skills are a must and a legal background is highly recommended. Competent findings require an excellent understanding of the principles of evidence and the elements of breach. Whether defending the findings down the track or withstanding media scrutiny, a specialist legal investigator will be invaluable.

    On time and on target

    Assisted by counsel, the board should clearly establish the objective, scope, methods and timing for the investigation. Where there is a risk of destruction or tampering, early consideration of evidence preservation will avoid embarrassment. Clear understanding of your organisation’s policies regarding employee devices and information access significantly expedites those decisions.

    Establishing a special committee to direct the investigation can address potential conflicts of interest and prevent contaminating those who will later make decisions based on the findings.

    Investigations should never be rushed, but undue delay will be judged harshly by the media, the public and any aggrieved parties, so directors should address potential roadblocks in advance.

    Consider an oral report

    Oral reports, rather than the standard written ones, are underused in Australia. Where time is of the essence — and it is always of the essence — an oral report will shave weeks or even months of the process, meaning faster critical decisions. It also lets directors discharge their duties of enquiry by asking the investigator specific questions in a safe environment. Of course, a comprehensive written report can always follow.

    David Steirn is the director of Enterprise Investigations Pty Ltd and a former barrister.

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