When should you consider an outside investigation?

It has been widely reported in the press that the founder and chief executive of the retailer Ted Baker, Ray Kelvin, resigned after a number of misconduct allegations were made including ‘forced hugging’.

Ted Baker appointed an external law firm to undertake an investigation into the allegations made against him.

Workplace investigations have historically been conducted internally. However, in recent years there has been a trend towards the appointment of external investigators. Abigail Maino, senior associate at DMH Stallard offers some advice on when to bring in the experts…

When to consider looking externally

Whilst there are no strict rules, certain factors may indicate that it is necessary or appropriate to appoint an external investigator. This can include:

  • Where allegations involve sexual or other serious misconduct against senior executives, where internal investigations may not command the same credibility.
  • If an investigation is likely to uncover issues with regard to culture, practices or procedures, as these may be hard to investigate effectively by an internal investigator who may not have experience of other cultures or industry practices.
  • If an allegation is likely to gain media interest, passing the investigation to an external party can assist an organisation from a reputation management perspective by demonstrating that it is being taken seriously.

Initial issues to resolve

There are important issues to be considered at the outset of any external investigation, such as:

  • Who will be appointed as the external investigator? There are a number of options including an external HR professional, a lawyer or another third party with relevant expertise. The choice is likely to be guided by the issues to be investigated.

 The content of the Terms of Reference, to ensure the parameters of the investigation are clear to avoid the investigation ‘mushrooming’ and the investigator exploring issues which are not relevant.

  • How will communications and confidentially be managed internally?
  • Are you operating in a regulated environment, such as the financial sector, and is there a regulatory requirement to report the allegations made?

Why does this matter?

An effective external investigation can add credibility to an organisation’s internal processes, for example removing any suggestion of bias or favouritism. It can also help with risk management generally, and may create a more solid foundation from which to take appropriate action.