INTERNAL INVESTIGATIONS – SELECTING THE INVESTIGATOR’S QUALIFICATIONS AND CHARACTERISTICS

If you are a director or a board committee or special committee member, and you are relying on an internal investigation, or you are involved in or exercising oversight of an internal investigation, have you thought about the desired qualifications and characteristics of the investigator or of the people who are involved in or helping with the investigation?

If you are a director or a board committee or special committee member pursuant to the business judgment doctrine and various statutes you may rely on other people including information provided by other people (1) only if you believe those people are reliable and competent in the matters that they are addressing, (2) only if your reliance is in good faith, after reasonable inquiry as warranted by the circumstances, and (3) you do not have knowledge that would cause reliance to be unwarranted.

So what are the qualifications and characteristics that you might look for in a person who is going to perform an internal investigation on which you are going to rely? I say, what qualifications and characteristics you might look for, because no legal bright line or mandatory list exists. And, of course, no two internal investigations are identical.

The following are the initial questions that I would be asking, and the initial qualifications and characteristics that I would be evaluating. What do you think?

  1. What is being investigated? What issues and factual situation or situations?
  2. Why is it being investigated? What has prompted or required the investigation?
  3. Who will use or be relying on the investigation?
  4. Should the investigation be legally confidential, such as protected by the attorney client and/or work product privileges?
  5. Is it possible that you will want or be required to disclose the investigation to the public or outside sources, and its processes, results and report?
  6. What is the investigation process? Is there a specific required investigation process. Is the proposed investigation process reliable? How will other people who are skeptical of the investigation view the process and its reliability?
  7. Is the proposed investigator independent? Will the proposed investigator be viewed as having a conflict or bias?
  8. Is the proposed investigator sufficiently experienced in the subject matter area such as employment, FCPA, accounting, internal controls, product liability, fraud, securities, and the product, service or occurrence at issue?
  9. Is the proposed investigator sufficiently experienced in doing investigations and questioning people?
  10. Does the proposed investigator have the appropriate demeanor and approach?
  11. Can the investigator write well?
  12. Is the investigator knowledgeable about the pertinent burdens of proof and standards of care for the occurrence being investigated?
  13. Will the investigator be able to comment about additional facts or evidence that might be needed?
  14. Presumably an end result or opinion will be required – is the investigator qualified to not only collect but also to analyze, evaluate and quantify the facts and evidence obtained and still unknown?

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