Internal surveys: news and perspectives

A necessary instrument for any successful compliance policy, internal investigations are democratizing in their principle and application. This phenomenon is accompanied by new questions: in what context and according to what methods to initiate internal investigations? How to ensure their legality? Overview of the reflections and practices of our members.

In recent years, and perhaps even more in recent months with the Covid-19 crisis, corporate responsibility is increasingly questioned in society. The company must now be accountable, transparent, even exemplary.

In this context, they are expected to exercise increasingly detailed control missions over everything relating to their activities. For them, it is a question of controlling, identifying and sanctioning unethical practices, avoiding any risk of corruption, discrimination, and preventing any breach of the regulatory corpus. What is more, the latter must henceforth set an example on ethical issues and major social issues.

In this context, internal fact-finding missions within companies are becoming increasingly important. Intended to allow organizations to quickly identify and sanction any breach of the law or ethics, the internal investigation is required to become institutionalized, which poses many challenges for companies.

The internal investigation in full institutionalization

Gradually, the obligations relating to internal investigation processes in companies are reinforced. Over the past five years, several regulations have thus come to frame and institutionalize the practice of internal investigations.

Under the Sapin II Law, the advent of the whistleblowing system provided for in article 17 has led to an increase in the use of the internal investigation process in order to be able to deal with reports made by company employees.

In addition, various judgments of the higher courts have gradually clarified and supervised the internal investigation procedures.

On February 28, 2018, in its judgment 17-81.929, the Cour de cassation thus established the company's ability to carry out investigations to identify and sanction criminal behavior. A year and a half later, on November 27, 2019, the Court clarified and established an obligation to investigate in the event of an alert for acts of moral, physical or sexual harassment (judgment 18-10.551). Finally, in March 2020, a decision of the Council of State regulates the practice by providing that the employer's power of investigation may not infringe on the employee's privacy (judgment 418640).

Companies and the ethics and compliance departments are therefore seeing their internal investigation prerogatives progressively strengthened and clarified.

The internal investigation at the heart of the company's new social and ethical responsibilities

The more systematic recourse by companies to internal investigation mechanisms is also proving to be the result of a cultural evolution: the actions of companies are now in the spotlight. Media, but also citizens are more and more attentive to the possible ethical failures of these organizations. The issue goes beyond that of simple compliance to extend to that of societal standards that can affect the reputation of the company and in particular its " license to operate ".

In this respect, the recent example of the dismissal of Rio Tinto's CEO, Jean-Sébastien Jacques, is enlightening. In this case, the internal investigation was initiated not following a breach of regulatory compliance, but more surprisingly, following a breach of compliance with the values of the company. The internal investigation then goes beyond its initial borders to focus on ethics and values.

With the coronavirus crisis, this movement seems to be growing even stronger. The company is now expected on all major social issues, from social issues to ecology. And the internal survey is gradually becoming one of the tools available to organizations to guarantee their exemplary nature on these subjects.

Emerging issues related to the development of internal investigations

Increasingly faced with the problem of internal investigations, companies must therefore put in place appropriate monitoring procedures and practices. Other ethical questions then emerge.

First of all, that of acculturation: within a company, the setting up of internal surveys can be a real cultural shock which requires organizations to make deep educational and clarification efforts. It is therefore a matter of demonstrating how the internal investigation is part of a process of continuous improvement of organizational mechanisms relating to questions of ethics and values.

It is also a matter of not making it a simple sanctioning tool but an axis of continuous and collective progress, which must elicit the support of everyone and whose legitimacy must be fully understood.

The question of methodology is also fundamental in order to take the lead on the many ethical questions linked to internal investigations. Now fully vested with supervisory and investigative responsibilities, companies must clearly understand and define their role. As such, it seems important to develop a methodology clarifying the boundaries of the internal investigation, in particular when it touches on issues with potential legal implications, or which could be the subject of judicial investigations. The internal investigation must respect several main principles: that of neutrality, the presumption of innocence, discretion or confidentiality.

Finally, there are many questions about the distribution of responsibilities relating to the internal investigation in the company. Who manages and coordinates internal investigations? Should we set up an alert handling committee? Should employees be trained in investigative practices, and if so, how? Who guarantees a fair and compliant conduct of internal investigations? What are the proportionate and measured sanction grids applicable in the context of an internal investigation? Or more broadly, how to manage the emergence of securities and other para-regulatory issues within the framework of corporate control and investigation missions?

Internal investigations: a confidentiality and data protection issue

The development of internal investigations is also leading companies to new questions regarding confidentiality and data protection, and more specifically compliance with the General Data Protection Regulation (GDPR).

The drafting of internal investigation reports thus raises many questions: how to guarantee the confidentiality and protection of the data of the employees involved? How to secure the data stored following an internal investigation? What archiving methods combine the secure retention of data for as long as necessary with the protection of individual data?

The development of the responsibilities of companies in terms of internal investigations thus leads to new ethical considerations. The questions raised by the democratization of internal fact-finding missions are therefore proving to be a real challenge for E&C professionals who will undoubtedly have to face them or participate in them more and more regularly in the years to come.

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