This is the eighth in a series of articles intended to assist organizations in assessing their anti-corruption programs through the lens of the 10 hallmarks of an effective compliance program as set forth in “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (“the Guide”), jointly published by the U.S. Department of Justice and the Securities and Exchange Commission in November of 2012. This article centers on hallmark number eight:
Confidential Reporting and Internal Investigation
A thoughtfully conceived and well-implemented anti-corruption program will produce various categories of alerts or “red flags” that require investigation. An important mechanism of your program is providing the means for individuals to communicate confidentially any suspicions or allegations of improper or illegal acts.
Typically, companies will contract with an outside party that provides hotline and issue-tracking services, allowing individuals to provide information about suspected misconduct on a confidential basis. While some callers (or emailers) may request anonymity, often anonymity can inhibit the company’s ability to investigate an allegation fully. Many organizations encourage tipsters to provide information instead on a confidential basis, giving the company latitude to re-engage and ask follow-up questions as an investigation progresses.
Since so much of an anti-corruption program is geared toward the establishment of a framework to generate red flags, it is vital for the company to have a protocol for the intake, triage, investigation and disposition of any allegations received. An investigative protocol is an outline of the steps to be taken as part of the investigation and the resulting documentation. Equally important is the designation of who is responsible for the investigation, who from legal or compliance will oversee it and how additional steps will proceed should escalation be warranted based upon the findings.
The importance of ensuring you have appropriate subject-matter expertise both in the performance of an investigation and its supervision cannot be overstated. Some companies give short shrift to this critically important part of their program. Since the entire program is geared toward generating red flags, part of the government’s appraisal of its overall efficacy is ensuring you have allocated sufficient resources with the right skills to investigate them.
This article is part eight in a 10-part series exploring Anti-Corruption and the 10 Hallmarks of an Effective Compliance Program. Each piece in the series is based on a section from a whitepaper published by Protiviti, titled “Viewing Your Anti-Corruption Efforts Through the Lens of the Hallmarks of an Effective Compliance Program,” which is available in full at:http://www.protiviti.com/en-US/Documents/White-Papers/Internal-Audit/Viewing-Anti-Corruption-Efforts-Lens-Hallmarks-Effective-Compliance-Program-Protiviti.pdf