At Freescale Semiconductor, Inc., Larry M. Parsons
is the "triage point" for corporate ethics line reports.
decides who should or should not be investigated.
Conducting a successful ethics investigation often requires a fine balance-between not doing enough and doing too much, Parsons tells Ethikos in a recent interview.
One has to avoid becoming 'paralyzed' by too much data.
does more than 100 investigations a year, estimates Parsons, the company's vice president, business conduct and ethics.
Of these, Parsons
himself conducts about 12 to 20, often the most sensitive ones.
Parsons had represented Motorola while practicing labor and employment law at Fulbright & Jaworski, L.L.P.
When Motorola offered him a position as its labor lawyer in 1995, he also became the firm's in-house specialist with regard to ethics investigations.
If an allegation arose in connection with a senior person in Motorola's phone division, say, Parsons would often conduct the investigation.
With the spin-off of the firm's Semiconductor Products Sector, Parsons
faced a decision: stay with Motorola
or go with the new company.
He went with Freescale and was handed responsibility for the company's ethics and compliance office, along with other areas, like labor and employment law and immigration. (The company has many H1-B employees, and has always had a big in-house immigration group.) He also oversees corporate social responsibility and investigation matters.
A process that 'works for us'
describes the company's investigations process as one that "works for us given our structure, our size, and my background [in investigations].
The function is centralized and "most investigations will go through me."
Other company units are often involved in investigations, however.
If an employee relations issue has been raised, like a bad performance review, Parsons
typically goes to the company's human resources (HR) team. (If the problem is with the HR
office itself, the investigation will be moved somewhere else.)
If it's a loss prevention issue, a matter of "shrinkage," say, he'll usually assign the matter to security.
If the question is one of intellectual property, Parsons
will draw on specialists within the company's law department.
also has a lawyer working exclusively for him who does domestic employment law.
himself usually conducts investigations of senior managers, however, and "more delicate matters," as well as anything involving a government investigation.
He'll decide whether or not to bring in outside counsel.
He did bring in outside counsel in connection with a recent SEC investigation into insider trading vis-a-vis Freescale's acquisition of a public company.
In the end, it was determined that a "rogue" employee had traded on inside information; the corporation itself suffered no penalty.
Indeed, that investigation proved beneficial for his
asserts, because it led them to look anew at what they were doing with training, confidentiality agreements, and some other compliance areas.)
When an inquiry came from the FBI on an export matter, by comparison, Parsons elected not to retain outside counsel.
"We were not the target" of the investigation, he
begins an investigation, he
asks, "Where are the sources of information for me?
Above all, "I look for a story that makes sense," says Parsons
Seeking an interview with the individual who is the 'target' of an investigation is among the last steps Parsons takes.
He'll plan out interviews with others leading up to the target, always asking: Will they alert the target if he
[Parsons] contacts them?
"You never go into that interview [with the target] unprepared," says Parsons
was initially somewhat skeptical.
also scanned e-mails.
Within the archives Parsons found a discussion between the supplier and employee about entertainment-i.e., entertainment that the Freescale employee might expect to enjoy during the upcoming trip.
Significantly, the destination was Amsterdam, a city where the supplier had no factories or offices, suggesting a pleasure journey rather than a business trip.
Even though Parsons
now began to believe that the employee had indeed solicited travel from the supplier as the supplier alleged, he
still wasn't ready to confront the employee.
approached the new vendor.
Had anything similar been demanded in that firm's dealings with the Freescale employee under question?
The new vendor was cooperative.
After all, he
wanted to keep Freescale Semiconductor
as a client.
Yes, the employee had solicited travel from this firm, too.
Parsons spoke with the CEO of the new supplier.
The CEO hadn't been told about the solicitation from the Freescale employee, the CEO said.
"This won't happen again," the supplier vowed.
explained further, "We need your help."
requested that the supplier examine its travel and entertainment records and e-mail archives.
Did the Freescale Semiconductor employee offer to reimburse the vendor for the travel he
It was time to confront the 'target' employee whose position now seemed increasingly tenuous.
still couldn't assume his
All sorts of explanations might be offered; anything can happen in an investigation, after all.
wondered, "What bomb are they going to drop?"
met with the employee.
It was a long interview.
The employee emphatically denied the allegations.
had made the trip, but he
had paid back the vendor.
moved the discussion on to the new vendor.
recounted what he
When the interview concluded, Parsons
told the individual, "You should go home, and we'll be in touch.
Asked about 'dos and don'ts' when conducting an ethics investigation, Parsons
emphasized the need to review privilege issues related to the reporting and documentation of investigation results.
Parsons notes that he is both a lawyer and the company's ethics officer.
That can make for some confusion.
Before each investigation, he has a conversation with the law department in which he makes clear that "my role is investigator, your role is attorney.
This helps clarify things with regard to legal 'privilege.' As the investigator, Parsons
may be called upon to testify in a court of law.
conversations are not protected.
also explains this to employees.
has been with the company for a fairly long time, employees sometimes assume that he
is there to help them through the investigatory process.
That is not his
role is to gather the facts.
always makes sure that another person is in the room when he
That person serves as a potential witness and also takes notes while he
, concentrates on the subject. (The individual who usually accompanies him works in the company's security unit.)
will typically make recommendations with regard to discipline, but he
is usually not the formal decision maker. (In point of fact, however, his
recommendations are often accepted.)
Systemic problems are relatively rare
In the vast majority of cases (about 90 percent) the investigated misconduct is a function of "rogue employees," he
But in those instances where there is a systemic problem, Parsons
will make suggestions regarding how systems and processes might be improved.
He makes sure to keep the company's board of directors up to date on investigations.
Because of the relatively manageable size of the organization, Parsons
is able to meet regularly with the legal committee of Freescale's
board and provide that group with a short summary of every matter that he
has investigated, flagging the most important ones (e.g., the SEC investigation).
investigates 10 to 20 cases a year, most of them might be presented as four- to five-sentence summaries.
About 14 people report to Parsons
They include import/export experts and professionals working in the company's Environmentally Preferred Products (EPP) program, which tries to incorporate environmentally friendly materials and design features in the company's products.
Only three of his
direct reports are general compliance professionals.
also oversees a labor employment attorney and a paralegal who focuses on training and communications, mostly.
Like every department, Parsons' office has been hit by cost-cutting recently.
would like to have a staff of investigators, one for Latin America, say, and another for Asia.
But given that the company's work force has shrunk in recent years,