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Under the looking glass: why internal investigations matter

Internal investigations are important in preventing and identifying workplace crime, writes Nicola Sharp from Rahman Ravelli.

Business crime will be committed to any type of company or organisation if it is allowed to happen. A perpetrator is more than likely to commit another, similar offence if the original one was not investigated. Internal investigations are, therefore, of obvious value when it comes to establishing whether a crime has been committed and, if so, who committed it. And they have a deterrent effect.

But a thorough, properly-conducted internal investigation can also identify “fault lines’’ – areas in a company’s working practices that offer the potential for business crime to be carried out, often undetected. Making changes in the wake of such an investigation can go a long way to preventing future white-collar offences and the resulting legal, financial and reputational problems that these can bring.

Such problems are not hypothetical possibilities or rare occurrences. PwC’s ninth biennial Global Economic Crime and Fraud Survey found that half of all UK companies may have been affected by fraud or other economic crime since 2016. More than half of the organisations questioned had suffered losses of £72,000 or more – a costly warning of the dangers facing companies that do not investigate possible wrongdoing properly.

Some at a senior level in a business may believe investigations are unnecessary as any wrongdoing will cause little damage and news of it will not leak out, others may do nothing because they lack the expertise to investigate. But either approach is dangerous. We have already touched on the costs of business crime and there are legal experts available who will take on the task of conducting an internal investigation for companies.


Such expertise is needed to identify signs of wrongdoing and follow the evidence trail. An investigation has to be carried out correctly – it is the only real option available to companies looking to establish the facts regarding suspicions of wrongdoing by staff or trading partners.

An investigation that is rushed, lacks objectivity, is carried out by someone unsuitable or unskilled or is conducted at the wrong time can often be of little or no use. It can fail to identify wrongdoing, increase workplace tensions and even warn anyone who has committed an offence that they need to cover their tracks.

A proper investigation, however, will provide whoever commissioned it with evidence, as well as options once the facts regarding a crime have been established. If an offence has been committed, a business can report it to the police or other agency (such as the Serious Fraud Office), initiate civil proceedings against those believed to have committed the offence or bring a private prosecution, under the Prosecution Offences Act 1985, against those thought to be responsible.

The right legal expertise can give the appropriate advice on such matters. Bringing in lawyers “from outside’’ can also help avoid problems further down the line, if and when matters of legal privilege and confidentiality in relation to investigation documents become an issue that is pursued by the authorities.


An investigation, therefore, can be of immense importance to the functioning of a business; regardless of what sector it operates in.

But it must be remembered that systems have to be in place to trigger an investigation. Simply being ready and able to conduct a thorough internal investigation is only part of the approach that is needed

An appropriate, properly-publicised whistle blowing procedure that encourages staff to report any suspicions of wrongdoing will be a genuine asset when it comes to prompting investigations. If staff members are aware that their concerns will be investigated thoroughly and discreetly, they will be more likely to be forthcoming with any suspicions (or even evidence) of crime in the workplace.

The last two years have seen some of the world’s biggest companies, Rolls-Royce, Tesco and GlaxoSmithKline, ordered to pay millions in fines in the UK for corrupt practices that could not be considered one-off events. If these problems had been identified and investigated earlier, the chances are the outcome would have been less catastrophic for all three.

The misfortunes of three such massive companies are just high-profile examples of what can happen to any company. They can only emphasise the importance of developing a workplace culture that frowns on crime; which can then be a deterrent to anyone thinking of committing it.

Investigations will always be the vital first step in determining whether wrongdoing has been committed and, if so, by whom. But the effectiveness of any investigation will depend on how it is planned and executed. The responsibility is on those running a company to ensure they entrust this to the right individuals.

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