On 6 December 2023, K2 Integrity and White & Case hosted a webinar on considerations for and the complexities of corporate investigations. Joanne Taylor, senior managing director at K2 Integrity, moderated the discussion with Ghazanfar Shah, senior managing director at K2 Integrity; Carroll Barry-Walsh, founder and director at Barry-Walsh Associates; and Jonah Anderson, partner at White & Case. To watch a recording of the full webinar, click here.
Investigation Challenges:
At the beginning of an investigation, watch out for these common pitfalls:
- The sense of loss of control and lack of direction that can come at the beginning of an investigation can often cause panic. When alerted to the need for an investigation, it is critical to avoid knee-jerk, impulsive reactions. Taking the time to think through the implications before releasing statements or taking action will ensure internal and external stakeholders have the confidence that the investigation will be handled properly.
- Scoping the investigation appropriately is crucial. If the initial scope is too broad, the investigation could become expensive and time consuming. When fact finding, keep an eye toward the future. For example, if the investigation raises a regulatory/law enforcement or civil litigation issue, these areas should be explored more deeply.
- At the initial stage, there is often conflict among stakeholders on how the investigation should progress and what the areas of focus should be. Some priorities will be explicit from a business or support functions perspective, while others will be less obvious. Stakeholders may be defensive. Having quality counsel is key to managing competing priorities while driving the investigation forward appropriately.
Toward the middle and end of an investigation, new challenges may emerge:
- Scope creep can occur while the fact pattern is still developing. New developments may arise or new whistleblower reports may be submitted that impact the direction of the investigation.
- There is often investigation fatigue as the client or business moves on to other priorities. This often prompts stakeholders to give a hard end date to investigators.
- It is easy to get bogged down in the detail and disappear down rabbit holes. There may be other avenues to pursue, but these may fall under the closing phase where remediation items and lessons learned are captured. Remedial actions should be assessed throughout the investigation in the event particular relationships need to end or specific practices need to change.
Investigation Best Practices
Ensure the investigative team covers multiple disciplines. To help an investigation to achieve its stated objectives, having the right team in place is essential. Business problems aren't singular, comprising only legal, regulatory, or employment issues. Rather, they are usually multi-faceted. It's important to bring in a multidisciplinary team of investigators—a team that thoroughly understands global and local regulations and can look at various aspects of the issue at hand and offer their expertise.
Implement a communications protocol. A solid communications strategy can help shape public opinion and ensure that all relevant parties have the information they need throughout the investigation. Legal teams may be involved heavily as they need to explain the business issues clearly so that the communications team can effectively draft messaging.
Make sure what is being communicated is correct; if there is doubt, it may be better to not comment at all. Statements made early on can look much less sensible a year or two later. Timing and alignment/parity of messaging is also important, particularly when messaging to regulators. Consider imposing guidelines around internal communications as well; with the variety of messaging technologies and data leaks, internal communications often come out in public.
Wrap up the investigation. Toward the end of an investigation, several steps should happen. The team should record what happened in the specific investigation, capture lessons learned, and assess the risk of the issue happening elsewhere. The client must take ownership of any issues and make the process improvements needed. It may be appropriate for the client to bring in their internal audit or risk groups. How organizations handle investigations will earn them some credit with internal and external stakeholders. At the end, the organization will be in a position to implement lessons learned and be better positioned for the future.
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