Introducing Compliance Hotline Investigations with Hanzo

| May 22 2019

Compliance teams and the investigations specialists within them are facing a tremendous logistical and technical challenge. Whistleblowing and internal hotline reporting volumes are at an all-time high, creating an influx of complex investigations involving employees, suppliers, and third parties. To manage these reports of misconduct, unethical behavior, and illegal business practices effectively, organizations must promptly and thoroughly investigate and substantiate claims and remedy any underlying issues.

This isn't just true of an organization's own expectations for their compliance program, but those of regulatory bodies like the Department of Justice (DOJ) too. 

At Hanzo, we believe that accomplishing these investigations-related goals requires leveraging modern technology and artificial intelligence to quickly find and preserve all of the evidence needed to reach a conclusion, and that websites and social media channels are a powerful but underutilized source of that evidence.

New written guidance shared by the DOJ in April 2019 via its updated Evaluation of Corporate Compliance Programs outlines clear-cut criteria regarding effective compliance investigations. Those guidelines include, but are not limited to:

  • Creating an anonymous reporting mechanism;

  • Having the ability to assess the seriousness of allegations, properly scope each report, and determine whether it merits further investigation and data collection;

  • Keeping these investigations “independent, objective, appropriately conducted, and properly documented”;

  • Being mindful of the time it takes to respond to allegations and conduct an investigation and using metrics to measure performance;

  • Collecting, tracking, analyzing, and using the information from the organization’s reporting mechanisms;

  • Ensuring accountability for any findings and outcomes of the investigation;

  • Receiving funding and budget for reporting and investigation-related mechanisms; and

  • Leveraging this wealth of data to identify any patterns of misconduct and compliance weakness.

These expectations and guidelines are thorough, helpful, and reasonable; however, as is the case with most compliance responsibilities, they are easier said than done.

At Hanzo, we’re applying our capabilities to address these challenges for compliance teams. We feel confident not just in our ability to successfully do so, but also in the necessity of the services we can provide. Our AI-powered hotline investigations technology uses the data you have to find the answers you don't. We enable you to search and preserve unstructured data from social media and websites so you can equip your team with new, previously untapped sources of evidence. 

But before we talk more about our solution, let’s spend a moment diving deeper into the problem at hand.

Research conducted by NAVEX Global for its annual Ethics & Compliance Hotline Benchmark Report, based on data from thousands of customers across different industries who are responsible for millions of individual reports, conveys two facts:

Compliance hotline reporting and whistleblowing are at an all-time high, which means the volume of investigations is at an all-time high too.

Amongst these millions of hotline reports, there is a concerning, consistent theme surrounding the nature of the misconduct at hand.


The State of Sexual Harassment Investigations in Organizations

“Between 2016 and 2018, reports of harassment increased by a substantial 18 percent. More specifically, between 2017 and 2018, reports of harassment increased by 8.5 percent.” —NAVEX Global 2019 Ethics & Compliance Hotline Benchmark Report

Harassment reporting is growing more prevalent in the wake of the #MeToo movement. This conclusion is supported by October 2018 data from the Equal Employment Opportunity Commission (EEOC) indicating a 12 percent yearly increase in sexual harassment charges filed with the agency.

This continued prevalence indicates both the persistence of this behavior and the growing resistance to letting it continue. In fact, the reporting category of “HR, Diversity, and Workplace Respect,” which sexual harassment and misconduct fall under, accounts for 70 percent of all hotline activity in NAVEX Global’s data set.

NAVEX

This dwarfs the concern and the volume of complaints around issues like financial reporting, business integrity, environmental health and safety, and misuse of corporate assets, all of which combine to make up the remaining 30 percent of activity.

But what’s truly troubling for compliance programs and the professionals tasked with investigating potential ethical, cultural, regulatory, and legal misconduct isn’t merely the volume of harassment and misconduct reporting that they’re responsible for investigating. Rather, it’s the success—or lack thereof—that they’re having in effectively managing that massive burden.

NAVEX Global’s research, which we reference again simply because it’s the largest and most substantial database of hotline activity available, points out two more troubling facts:

  • Only 41 percent of harassment reports and 29 percent of discrimination reports were substantiated in 2018.

  • Case closure time for these types of investigations is typically upwards of 40 days, with a median of 39 days. This length of investigation considerably exceeds the best practice case closure time of 30 to 32 days.

    NAVEX Global 2019 Hotline Benchmark Harassment Substantiation

These facts add up to one definitive conclusion for the compliance industry: Compliance teams are failing to promptly substantiate a majority of the reports they investigate, due in part to their inability to quickly and easily find the evidence they need, especially in relation to harassment and misconduct cases.

This doesn’t just demonstrate a fundamental lack of effectiveness from the DOJ’s perspective, but a long-term organizational risk that goes well beyond any individual allegation of misconduct.

“Allowing a workplace relations matter to fester for 39 days or more could lead to more problems and loss of morale and productivity.” —NAVEX Global 2019 Ethics & Compliance Hotline Benchmark Report

 

CONDUCTING BETTER, SMARTER, AND FASTER COMPLIANCE HOTLINE INVESTIGATIONS WITH AI AND MACHINE LEARNING


Fortunately, these are problems we’ve encountered—and solved—before. Much like compliance teams, legal and eDiscovery experts conduct a wide range of investigations on a recurring basis. These groups of professionals experience a similar set of problems:

  • Collecting data that can be used as evidence can theoretically be a never-ending process, depending on how it’s done.

  • Sorting through that data to determine what information is relevant and valuable as evidence to an investigation requires a huge time commitment.

  • Preserving this data in a way that can be admissible as evidence in court or in a regulatory matter presents additional technical challenges that can unintentionally render their work, and the time invested, meaningless.

Sifting through a haystack in search of a needle isn’t a reliable investigation strategy, nor is it an efficient use of time and resources. But what if people are so hung up on finding the needle in the haystack that they never realize where they should be looking? In their search for answers and evidence that can be used to substantiate an investigation and determine the legitimacy of a hotline claim or whistleblower report, compliance teams today are neglecting a valuable resource—one that legal and eDiscovery experts previously ignored, but have recently learned to embrace, with great success.

Websites and social media channels, which are the largest source of unstructured personal data to ever exist, are not typically leveraged for the incredible resource they can be, offering essential evidence that can readily substantiate compliance investigations.

Hanzo’s unique combination of proprietary technology, artificial intelligence, and Special Investigations Unit (SIU) intervention and review are designed to bridge this gap. By automating compliance investigations, we can make them faster, more conclusive, and less of a burden, shortening case closure time, improving substantiation rates, and simplifying how investigators and compliance experts collect relevant data.

Consider this compliance investigation scenario: Someone submits a report of sexual harassment by a manager through your compliance hotline. Preliminarily, there is enough information in the complaint to justify opening an investigation into whether this manager indeed harassed this employee. Hanzo’s technology crawls the web to find every public instance of this manager’s presence online and on social media. Targeting those profiles and using specific, customizable keywords and terms aligned with the nature of the investigation, we identify any posts, blogs, behavior, language, or explicit proof that align with the initial report of harassment and might help substantiate the allegations.

We then archive all of this potential evidence and preserve it in a legally defensible, compliant, and tamper-proof format that can be reviewed, shared, and used in court—preventing subjects from deleting evidence once they’re aware of the investigation into their behavior. Within a few days, this information is shared in a vetted report with your compliance team to complement what you’ve learned from traditional investigations channels, giving you a comprehensive picture of all the evidence so you can make a rapid, informed decision.

The simple fact is that while traditional investigation techniques like interviews and audits of email communications are still valuable and useful as part of a best-practice process, they should no longer be the exclusive source of answers in the search for the truth.

We all instinctively know that what people do and how they act at work is not a complete or honest representation of everything about who they are as individuals. We no longer limit our work activities, such as answering emails, participating in meetings, or working on projects, exclusively to an office—so why limit the scope of your compliance investigation to just the data you can collect within your office?

Our past success in working with legal firms and eDiscovery experts has shown that the behavioral and environmental factors that drive misconduct, while they may originate within an office, are often validated, nurtured, and shared online and on social media. That’s why Hanzo’s Dynamic Investigator and Capture technology are being used by lawyers and eDiscovery experts to quickly identify, analyze, and preserve relevant information from the web and social media in a legally defensible way.

Now, this technology is available to compliance teams. For the sake of your program’s effectiveness, we encourage you to embrace the reality that a massive amount of potentially helpful data exists online. That data can be used to expedite your investigations—and Hanzo is the right partner to help you find it, preserve it, and understand it so you can use it to deliver justice.

 

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