When suspicions of wrongdoing or illegal activity arise within an organization, conducting an internal investigation is crucial to mitigating potential damage to the organization’s reputation and minimizing legal exposure. According to recent guidelines, an internal investigation is warranted when there is credible evidence suggesting that a law or critical organizational policy has been violated. These investigations should address both parent and subsidiary levels for comprehensive risk management.
The importance of independence in these investigations cannot be overstated. Engaging external counsel who is not already representing the parent or subsidiary in other matters ensures objectivity and impartiality. This approach not only facilitates a thorough examination but also bolsters the credibility and reliability of the investigative findings.