Preliminary Considerations

The corporation should:

1. Determine if a mandatory internal investigation is required by statute.
2. Conduct an initial evaluation of the potential risks and adverse consequences of the alleged misconduct. For example, if the allegations are found to have merit, what would be the corporation’s disclosure obligations (market, self-disclosure to regulators, statutory remediation, etc.) and what civil liability and insurance considerations may arise?
3. Consider the existence (or likelihood) of a parallel regulatory investigation or shareholder lawsuit as these may determine if or how an internal investigation is conducted.
4. Consider eventual cooperation with government and regulatory authority investigators at an early stage. Early and accurate disclosure will help the company mitigate any regulatory action, avoid “cover up” allegations and some consequences related to civil lawsuits (e.g., punitive damages).
5. Take measures to establish and maintain solicitor-client and litigation privilege and consider the pros and cons of waiving privilege.
6. Consider the benefits and disadvantages of Common Interest Privilege Agreements and Joint Defence Agreements.

Conduct of Internal Investigation

7. Board of directors should appoint a committee of independent board members (often the audit committee) to retain outside counsel to conduct the internal investigation and report directly to them.
8. External counsel must be impartial and independent from the interests of the board of directors, senior management, employees and agents of the corporation.
9. Independent committee should communicate that cooperation with investigatory counsel includes providing all relevant documentation, access to all employer authorized and personal digital devices and participation in witness interviews.
10. Independent committee and investigative counsel should agree on clear and specific reporting procedures.
11. Third party experts and consultants should sign retainer and confidentiality agreements with investigative counsel, confirming that their retainer covers matters that are protected by solicitor-client privilege.
12. Corporations should proactively adopt policies and procedures for evidence preservation and collection in anticipation of investigations.
13. Corporations should consider issuing a document hold notice to inform potential record-keepers to keep any records that may be relevant to the investigation.
14. Counsel should monitor document collection to ensure compliance with hold/retention policies, review protocols and investigative mandates. Electronic documents require special attention.
15. Conduct most interviews after completing the document review. However, initial interviews can occur prior to completing the document review to better understand issues and help find documents.
16. In-person interviews are generally preferable to remote interviews because they allow an interviewer to better assess a witness’ credibility.
17. At the beginning of each interview, witnesses should be given an overview of the investigation’s purpose and made aware of their rights and obligations.
18. Employee witnesses should be given an "Upjohn warning" (also called a "corporate Miranda warning") to ensure there is no confusion about the purpose of the interview and the privilege attached to it.
19. Corporations should generally not terminate an employee until they have given their evidence to the investigator. However, in some circumstances, it may be necessary to put an employee on paid leave during an investigation.
20. There should be a record memorializing the interview. However, discretion must be exercised when deciding to digitally record an interview. Often a written summary of an interview highlighting the important points is preferred.
21. Counsel should report all information and conclusions, but careful consideration should be given to the medium of the final report. For example, on one hand, a written report clearly documents the process and conclusions and assists board members properly discharge their fiduciary duty to come to their own conclusions based on all the information available to them. On the other hand, a written report creates a clear record of wrongdoing, which may be sought by adverse parties and increases the risk of leakage and loss of confidentiality and privilege.

Multi-jurisdiction Investigations

22. Retain local counsel in each relevant jurisdiction and obtain advice on the scope of privilege and how best to ensure that the investigation remains privileged.
23. Appoint a lead for the international legal team who should report to (and take instructions from) the corporation’s general counsel, board of directors or independent committee, as the case may be.
24. Lead investigator should obtain advice from local counsel about the foreign enforcement agency, namely possible penalties, immunity, amnesty or leniency programs, investigative tools and client’s rights in dealing with the agency.
25. Adapt interviewing and investigative techniques to accommodate cultural differences.