COVID-19 Update: FAQ and Other Information for Clients

Corporate Governance and Internal Investigations

As a business owner, you know how many gears must run smoothly for your business to operate at its full potential. Regardless of the structure of your business, situations may come up which threaten the morale of your employees or the faith of your stakeholders.

Misconduct can occur anywhere in your business – officers, middle-management, and other employees are liable to do something which may put your hard work and investment at stake. Both interpersonal misconduct and financial misconduct can become equally as troublesome. Dealing with these problems as they come up is paramount in order to minimize damage. Your employees do not want to feel unsafe or targeted at work. Besides the obvious need to protect them, cutting off misconduct and bad behaviors at their roots also will help them be more productive. Internal investigations (especially when conducted by third-party counsel) can help employees who suffer due to misconduct to speak out without fear of retaliation, which is something that can occur with an internal investigation run by people higher-up in the business or other personnel. Any potential existing relationships can alter the willingness of someone to speak out, even when it would potentially be in their best interest.

Interpersonal misconduct is not the only kind of behavior which warrants internal investigations. There are other illegal or shady activities which those part of a company’s governance can take part in. The widespread fraud in companies such as Enron not only tanked the Enron Corporation, but it also took down other companies – like Arthur Andersen – which were complicit in its behavior. Besides that, it hurt many others when the fraud was realized. Depending on the violation, those who aren’t stopped early on can be subject to criminal penalties as well.

There are hundreds of reasons that good corporate governance is vital to companies. Ultimately, quality company organization, consistent checks and policies on misconduct, and a willingness to investigate to make sure every aspect of the company is operating correctly saves money and time in the long run. It helps your business run smoothly, and it puts trust in your investors that you’re a competent and savvy business owner.

At KHF, our attorneys can help you govern your business to avoid or address these issues. If you feel that a situation in your company demands investigation in order to resolve any ongoing problems, we are able to help you too. Our attorneys’ knowledge, experience, and understanding of what is most important for you and your business will help you avoid the damages associated with misconduct, keeping your business firing on all cylinders.