Back in the book of Genesis, the first-ever investigation was pretty straightforward: only two potential perpetrators, a single location (under a tree), and an omniscient investigator. Things have become much more complex since then—and in most cases, we don’t have the benefit of an omniscient investigator. As such, most organizations should develop an approach to internal investigations that improves effectiveness while reducing costs and complexity.
Establishing a clearly defined process helps management respond quickly to allegations of wrongdoing and actual violations in a rational, rather than ad hoc, manner. In other disciplines such as software development, we know that a reactionary response to “bugs” can cost five times more versus a planned response. A recent conversation with a chief compliance officer at a large industrial manufacturer suggests that this rule is applicable to internal control and compliance. Said he: “After we organized our approach to investigations, our costs dropped dramatically. Unfortunately, it wasn’t for lack of investigations. As investigations volume went up, our annual costs actually went down 15 percent.”
