This week we are focusing on the Top Trends to Watch in 2014 regarding corporate investigations.  I wanted to follow up on my Tuesday blog with a few more observations on the major investigative priorities we believe will be key agenda items for many enterprises this year.

In addition to the three I identified earlier this week – (1) fraud, waste and abuse; (2) internal collaboration and cross-functional information sharing; and (3) international investigations – there are three more well worth tracking.  These are the focus of today’s blog: (4) compliance investigations, (5) development of programs focused on ethics, integrity and character; and (6) growing awareness of the value of investigations by objective, independent third parties.

Trend #4: Is the Compliance Review Done? The CEO’s Office is Asking

For years, companies have seen the core of their corporate investigations run the usual gamut from employee conduct issues, fraud and embezzlement, and procurement violations to libelous accusations, internal conflicts of interest and other in-house matters.  These priorities will continue in 2014, of course, for the General Counsel’s office, the Director of Security’s team and security heads responsible for areas such as HR, supply chain and intellectual property protection. But, unless they are highly strategic, they may not command the same attention in the executive suite and the boardroom as in the past – for one reason: compliance investigations are increasingly taking the spotlight.  We saw confirmation of that in yesterday’s Wall Street Journal article on compliance – and its summary of separate 2013 surveys by PricewaterhouseCoopers LLP and Deloitte.  The bottom-line takeaways of the article: (1) the Chief Compliance Officer’s standing is on the rise – often with a direct reporting line to the CEO, (2) compliance budgets are increasing in response to more aggressive government enforcement action, and (3) the “economic value of compliance becomes clearer after companies have paid penalties for transgressions.”

Trend #5: Spotlights Up on Ethics, Integrity and Character

If compliance proves to be a major driver of corporate investigation priorities in 2014, we anticipate further growth in another major trend we have been tracking for several years: growing interest in programs that track, monitor, investigate and promote ethics and integrity programs in business.  These take many forms, such as:

  • Corporate governance boards
  • Advisory councils and committees focused on standards and integrity
  • Ombudsman and Inspector General programs
  • Business ethics training and awareness curriculums

Selecting mechanisms such as these depends on a wide range of factors, such as regulatory requirements, degree of transparency sought, target audience, intended outcome, authority and independence issues, and the depth and breadth of cultural change objectives.  So who will be pushing hard on these levers in 2014?  Two types of businesses – judging from our client base and our perspective on this issue nationally: (1) corporations reeling financially from a breach in ethics and integrity matters or costly regulatory enforcement action and (2) organizations with a track-record of prevention and a risk-driven approach to “getting out in front” on ethics, integrity and character matters in the workforce.  The investigative process will be core to both.

Trend #6: “We Won’t Be Believed – If We Investigate This Matter Ourselves”

At the heart of compliance, oversight and monitoring activities – and every facet of investigations that support these areas – is independence.  We believe that this year, more corporations will tap the value that public sector organizations have long found in engaging an objective, independent entity to investigate critical issues that threaten to seriously undermine or sabotage mission, reputation, fiscal integrity, performance efficiency and workforce morale. Why?  (1) Findings identified by an independent investigative team carry far more credibility than those developed by an in-house one because they are deemed by stakeholders to be independent. (2) An independent team evaluates facts and evidence from an objective perspective, free from conflicts of interest, actual and perceived.

What’s at the top of your investigative agenda this year?

Do these trends resonate with you?  Are you seeing evidence that counters these perspectives?  What’s your point of view? (This blog is part of a series that Hillard Heintze executives and experts are authoring throughout January 2014 on the Top Trends to Watch in 2014 in three discrete areas: (1) security risk management, (2) investigations, and (3) ethics, integrity and law enforcement program improvement.  These are published on Tuesday and Friday of each week in January.  Want an automatic alert when the next blog goes up?  Take a moment and subscribe to The Front Line).