Internal compliance investigations: More important than ever

Thad McBride (tmcbride@bassberry.com) is Partner at Bass, Berry & Sims PLC in Washington DC. Kate Garfinkel (catherine.garfinkel@alcoa.com) is Vice President and Chief Ethics & Compliance Officer at Alcoa Corporation in Pittsburgh, Pennsylvania.

Every day, the news brings a fresh report of allegations or even admissions of wrongdoing: high-profile individuals accused of sexual harassment, high-profile companies settling allegations of corruption, high-profile officials implicated in political skullduggery. According to one source,[1] “…heightened awareness of sexual harassment in the workplace, triggered by the daily publicity of harassment accusations…has resulted in a surge of client calls to plaintiff attorneys who litigate such claims.” Corporations are no doubt receiving more hotline calls.

Now more than ever, it is essential that companies have policies that address harassment, bribery, quality, trade, antitrust, environment, and a host of other compliance topics. World-class companies have these policies. But the question for compliance professionals is how effective these policies are when, not if, allegations are made. A strong internal investigation process can make the difference between identifying and addressing a problem early on or letting it fester into an issue that becomes a legal liability and reputational crisis. Now is a good time to consider whether your internal review process is up to snuff.

An effective compliance program prevents, detects, and addresses violations of law and/or company policy. Internal compliance investigations and reviews, when conducted in a confidential and professional manner, ensure that a company can adequately address compliance issues. This article lays out a number of best practices for conducting internal compliance reviews. While every review is different, there are certain steps and procedures to follow to ensure the review is effective.

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