Speed and Accuracy Are Vital for Quality Internal Investigations

Internal investigations are a fundamental part of corporate governance. They enable companies to uncover potential regulatory violations, address legal risks, and strengthen their compliance programs.

With the recent launch of the Department of Justice Corporate Whistleblower Awards Program, businesses now have even more reason to act quickly. The program incentivizes companies to investigate and self-report violations within 120 days by offering the potential for reduced penalties or declinations from the DOJ.

Today’s complex regulatory environment requires businesses to proactively identify and rectify issues before they spiral into costly problems. Presenting the findings effectively to the general counsel or board of directors ensures that decision-makers have the information they need to act swiftly and decisively.

Companies that promptly investigate potential violations protect themselves from escalating legal or regulatory consequences. Internal investigations can halt misconduct and prevent further damage before it becomes a larger issue, such as a lawsuit or regulatory enforcement action.

Many industries—such as health care, finance, and tech—are tightly regulated. Companies often are required to investigate potential legal violations internally. Failure to do so can result in regulatory sanctions, penalties, or reputational harm.

When companies investigate and address violations proactively, they often receive more favorable outcomes from regulators. Demonstrating a commitment to compliance can help reduce penalties or prevent further scrutiny.

Internal investigations often highlight weaknesses in compliance systems or internal controls. This offers the chance to improve policies and prevent future violations, ensuring long-term compliance health.

A strong culture of accountability helps maintain employee confidence in the company’s leadership and commitment to ethical standards. Employees are more likely to report misconduct if they know issues will be handled fairly.

Conducting a well-structured internal investigation is essential. These key steps will help ensure the process is handled effectively.

Independence: Investigators should remain impartial and free from conflicts of interest. If necessary, bringing in external counsel can provide an unbiased perspective, particularly for high-stakes issues.

Confidentiality: Keeping the investigation confidential helps maintain integrity. It also protects witnesses and prevents legal exposure. Maintaining confidentiality ensures that employees trust the process and that information is handled responsibly.

Thorough documentation: Every step of the investigation, from interviews to evidence collection, should be meticulously documented. This record will serve as a vital tool if the investigation is scrutinized by regulators or in legal proceedings.

Speed and accuracy: While it’s important to conduct investigations swiftly to mitigate risk, accuracy and thoroughness are equally crucial. Rushed investigations may miss key information, leading to incomplete or flawed conclusions.

Once the investigation is complete, it’s essential to communicate the findings in a way that equips decision-makers with a clear understanding of the issues, risks, and necessary next steps.

Begin with a concise overview of the investigation, including its scope, major findings, and recommendations. This helps focus attention on the key points and serves as a guide for deeper discussion as needed.

Present the findings in straightforward, unambiguous terms. If there are regulatory or legal violations, state them clearly and support your conclusions with evidence. Transparency is essential for building trust in the findings and ensuring informed decisions.

Provide a detailed risk assessment, outlining potential legal, financial, and reputational consequences. Highlight both immediate risks and long-term challenges the company might face if the issue isn’t addressed. Giving decision-makers a clear understanding of the stakes ensures they can take decisive action.

Don’t just present the problems—provide solutions. Clearly articulate your recommended actions, whether they are disciplinary measures, policy changes, or self-reporting to regulators. Be prepared to justify your recommendations based on the findings and provide data or precedent when possible.

Anticipate tough questions from the general counsel or board members. Be ready with data to support your findings, and don’t shy away from admitting areas of uncertainty. It’s better to acknowledge gaps in knowledge than to speculate.

After presenting the findings, document the board’s response and any directives they issue. This is important for internal accountability and may also be required in case regulators ask about the company’s response to the investigation.

In the long run, committing to self-regulation and improvement fosters a culture of compliance that protects the company and strengthens its reputation as a trusted and accountable organization.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Allison E. Raley is partner at Arnall Golden Gregory and co-chairs the emerging technologies industry team and women in tech law initiative.

Write for Us: Author Guidelines