Skip to content

18 May, 2022

Subscribe Advertise About Us
  • My Account
  • Register
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
    • Categoriess

      • View All
      • Board Moves
    • Houses of Parliament

      Government confirms commitment to sustainability disclosure requirements

      The UK will proceed with legislative plans for SDRs, including transition reports, after the proposals...

    • Amanda Blanc, Aviva CEO News round-up: this week in governance

      Aviva CEO faces "inappropriate" remarks at shareholder meeting; warning for Twitter board over free speech;...

    • Prince Charles reads the Queen's Speech on 10 May 2022. Queen’s Speech fails to provide clarity on audit reform plans

      While the creation of ARGA is confirmed, details about other proposed changes are scant and...

  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • Businessman surrounded by news reporters

      The heavy cost of boardroom disasters

      The size and global reach of modern businesses means that the repercussions of scandals and...

    • Multicolour building blocks

      Parker Review: progress update and priorities for change

      The latest review identifies the work of increasing and maintaining ethnic diversity on UK boards,...

    • President of Ukraine Volodymyr Zelensky visits Bucha, 4 April 2022

      What Ukraine teaches us about effective leadership in a crisis

      In conflicts and crises, people look to both political and business leaders for reassurance, competence...

  • Comment
      • View all
    • Businessman in thinker pose

      What’s a company for? Milton Friedman responds

      The ongoing lively debate about corporate purpose has caused me to reflect further on the...

    • Maritime workers protest about the sacking of P&O workers How to sink a reputation: lessons from the P&O Ferries crisis

      The company has destroyed the trust of passengers and employees, and demonstrated the consequences of...

    • Ukraine flag with coding Business concern over cyber attacks rises in wake of Ukraine conflict

      Geopolitical uncertainty is leading firms to boost their defences against cyber attacks. But true digital...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • Sir Donald Brydon Sir Donald Brydon on audit reform, career NEDs and board relationships

      While bemoaning the "glacial" pace of audit reform, he hails the pandemic's transformation of communication...

    • Forex graph behind boardroom Webinar: what’s next for boards in financial services?

      Our panel of experts share their thoughts on some of the current and future challenges...

    • Man working remotely Pandemic ‘opened door’ to the use of new boardroom technology

      A recent webinar hosted by Board Agenda and Diligent explored the ways boards are using...

  • Careers
      • View all
      • Selection
      • Board Moves
    • Business meeting Age-diverse boards associated with less corporate misconduct

      More age diversity, researchers say, could reduce “groupthink” and lead to “more critical judgment of...

    • CEO leaving office after resignation Most CEO ‘resignations’ may actually be terminations

      Retired, resigned or left the company? A Stanford study suggests more chief executives are pushed...

    • Executives following different leadership paths Selecting a direction: the six paths to leadership

      The distinct paths taken by executives when assuming leadership roles will influence their perspectives and...

  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Corporate & Advisory Services
    • Board Effectiveness: A Survey of the C-Suite

      More than 550 public company C-suite executives share their perspective on their boards’ overall effectiveness,...

    • 2022 AGM Season Forecast: An Eye on The Horizon

      To help prepare for AGMs in 2022, Equiniti (EQ) highlights three key themes of the...

    • Annual Review of Corporate Reporting 2020/21

      This report contains the main findings arising from FRC's corporate reporting monitoring work, which is...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Selection
    • Board Expertise
    • finance
    • Technology
  • Magazine
      • View All
      • Sustainability Works
      • Tomorrow's Leaders
      • Renumeration Tightrope
      • Governance Ascendance
      • Sense In Sustainability
      • Invisible Enemies

Internal investigations are on the rise—but are they robust enough?

by Gavin Hinks

New legislation in the UK and Europe has added pressure for more internal investigations. But the lack of guidance puts companies at a disadvantage.

Man with magnifying glass

Image: FGC/Shutterstock

Companies today are under greater scrutiny than perhaps ever before. As a consequence there has been marked increase in the number of companies conducting their own internal investigations, caused by either a regulatory probe or by a business itself uncovering wrong doing.

But if internal investigations are to please regulators, or form a solid basis for disciplinary action, they have to be robust. With little guidance available, that places companies at a disadvantage.

A plethora of new legislation in the UK and across Europe has added pressure for more internal probes.

According to Nigel Layton, a partner in forensic and investigation services at Mazars, the regulatory environment has strengthened, fuelling a rise in investigations.

“Corporates are now expected to comply with a host of anti-bribery and anti-corruption laws that can lead to severe sanctions when things go wrong. The regulatory environment for corporates is starting to go the same way as the banks,” says Layton.

Focus on compliance

The issue is pressing. A recent survey by eDiscovery and compliance services company H5 looked at expectations in companies around the world and found that 63% anticipate the number of corporate internal investigations to rise over the next three years. Increased regulation and a greater focus on compliance by regulators have proved key factors.

The pitfalls are numerous… but they can be avoided. And that’s important because regulatory authorities are watching

That places a premium on getting an investigations right. Board Agenda has partnered with Mazars to produce a guide to best practice in internal investigations.

The guide examines how to prepare and scope out an investigation; who is best placed to undertake the work; the governance issues affecting an investigation; how co-operation with regulators and authorities should work; the way evidence should be collected and preserved; and how witness interviews should be conducted.

There is much to consider and the pitfalls are numerous for boards and company managers. But they can be avoided—and that’s important because regulatory authorities are watching. The Financial Conduct Authority has noted that watchdogs cannot “naively” accept a firm’s work and conclusions.

Regulators are also alert to increased risk. The National Crime Agency has noted publicly that as the UK departs the European Union and companies seek trade elsewhere they are likely to encounter “corrupt markets”, particularly in the developing world, “raising the risk they will be drawn into corrupt practices”.

External expertise

Perhaps the single most important decision will be who handles the investigation: outsiders or insiders?

Investigations can be a reputational and financial minefield if handled inadequately

For Mazars, outsiders provide key qualities, though a blend of resources may provide the best results. According to Nigel Layton, outsiders can offer “independence, objectivity and experience. They can also send a strong signal that the investigation has been conducted ‘properly’.”

He adds: “If handled purely in-house, issues that arise can easily be swept under the carpet; key witnesses or documents can be overlooked or may not be considered important at the time.”

Katie Miles, a forensic services manager at Mazars, underlines the importance of choosing the right route.

“The company should maximise the best possible blend of internal resources partnered with external experts,” she says.

Investigations can be a reputational and financial minefield if handled inadequately. The experts are clear: waiting for trigger events may be too late to implement an effective procedure. Plan now, put the right protocols in place and ensure board members are prepared, they insist. Having a plan in place can help a board ensure a company’s reputation, financial and legal positions are protected.

Download A Director’s Guide to Conducting Internal Investigations. 

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Boardroom pay revolts are on the rise as investors seek restraint
    July 2, 2021
    Coins in a pile

    Analysis by Board Agenda reveals that pay revolts in the first half of 2021 are up on the same period last year by 51%.

  • Being prepared: The rise in internal investigations
    December 20, 2018

    Financial firms are involved in an increasing number of internal investigations. Boards must be ready to engage with the process should the need arise.

  • The investor activists are here to stay
    August 1, 2018
    activist investors, investor activism

    Activist investor action is on the rise both in the UK and across the world. Kevin Reed examines what is driving this activity, how it…

  • Women on boards 'are driving progress on ESG'
    November 1, 2021
    Woman holding leaf

    The Sustainability Board Report says boardrooms need more women if action on ESG issues is to improve further.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

compliance, internal investigations, legislation, mazars, Regulation, reputational risk

Search


Sign up to our Newsletter

Receive independent news, thoughtful journalism & expert insights about leadership, corporate governance & key boardroom issues straight to your inbox every week.

SIGN UP

Follow Us


 

 

 

 

Most Popular

  • What’s a company for? Milton Friedman responds
  • Queen’s Speech fails to provide clarity on audit reform plans
  • Working from home? Stay alert to the risk of cyber-attacks
  • Government confirms commitment to sustainability disclosure requirements
  • Growing backlash against ‘inflexible dogma’ of ESG

 


 

Featured Partner Profile

Diligent

Diligent

Diligent Corporation, which was founded in 2001, is headquartered in New York, NY with a European HQ in London. Diligent’s modern governance platform empowers leaders and teams at every level of the organisation to digitally transform and create ...

Featured Partner Resources

Board Transformation 2021: Leadership in Transition

There can be little doubt that the global Covid-19...

Digital Boards: How Technology Adoption is Driving Culture Change and Resiliency

Digital tools proved their worth to boards during ...
EQ 2021 AGM Season report

2021 AGM Season: Successful AGMs in the Pandemic and Beyond

With the impacts of Covid-19 hitting just as the s...
Leadership in AI report

Leadership in AI 2021

This report from Board Agenda and Mazars, in assoc...
Creativity in a Crisis: a Boardroom Map for Innovation

Creativity in a Crisis: a Boardroom Map for Innovation

In the uncertain times at the height of any crisis...
Board Directors Guide to D&O Liability Insurance - November 2020 - AIG & Board Agenda

Board Directors' Guide to D&O Liability Insurance

Directors face liability over a range of new threa...
Leadership-in-Risk-Management-Board-Report

Leadership in Risk Management: Board Report

Board Agenda, in association with Mazars and INSEA...
Director's Guide to Internal Investigations

A Director's Guide to Conducting Internal Investigations

An internal investigation must be handled meticulo...

Global Business Complexity Index 2021

The Global Business Complexity Index 2021 provides...

 


 

ADVERTISE – FREE CORPORATE LISTING

FREE - Add your company profile to our Corporate & Advisory Directory.
ADD

ADVERTISE – PROMOTE YOUR REPORTS & WHITEPAPERS

FREE - Add your company profile to our Corporate & Advisory Directory.
Add Resource

Register Free

Register to receive free article views, selected resource downloads, and all the latest news alerts straight to your inbox. Register


  • Editors & Contributors
  • Corporate & Advisory Services
  • Media Marketing Solutions
  • Contact Us
  • Careers
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
  • Sitemap
|