Conducting internal investigations. Prevention of business risks

The key to the successful functioning of any business is a professional and well-coordinated team work and strong relationships with counteragents. However, a situation of incorrect or illegal actions on the part of a staff member or a counteragent may arise that interfere with the work of the entire company. 

In such cases, VigoLex recommends conducting an internal investigation in the company in order to eliminate the risks or the consequences of violation and take appropriate sanctions. 

Why should a company conduct an internal investigation? 

Based on the experience of VigoLex team, companies conduct internal investigations in order to: 

  • establish the involvement of staff members/counteragents in the violation of the law or the internal company policies; 
  • detect risks in the actions of staff members/counteragents and prevent possible violations on their part; 
  • perform regular corporate audit of corruption risks. 

Illegal or harmful actions by staff members can have many adverse consequences for the company. First of all, this is harm to the business reputation and the business brand, as well as the loss of profit by the company.

In addition, if the information on the unreliability of internal processes or the security system in the company becomes known to business partners, this can entail a number of consequences, for example: 

  • termination of relations with business partners; 
  • initiation of an international investigation (in the case of cooperation with foreign partners); 
  • filing complaints or claims against the company, etc. 

In what situations may an internal investigation be needed? 

VigoLex recommends its clients to conduct internal investigations in the cases where there is a reason to believe that there are the risks of: 

  • embezzlement or theft of the company property or assets; 
  • fraud on the part of managers, chiefs, etc.; 
  • investment scams; 
  • fraud on the part of suppliers, customers or clients; 
  • violations of the company internal policies and rules; 
  • theft or illegal access to the company confidential information, etc. 

An internal investigation helps the company not only to fight against the non-purpose embezzlement of corporate funds, but also to prevent possible damages to the business. 

An independent internal investigation allows the company to minimize the risks associated with already committed or potential violations, to structure the processes inside and outside the company, as well as to develop a strategy to prevent similar incidents in the future. 

Internal investigation: services of lawyers and attorneys 

The involvement of lawyers in conducting internal investigations in the company is widely practiced in the USA and European countries. Almost any corporate crime leaves behind a documentary or legal trail that can be detected by a professional lawyer upon an audit. 

VigoLex’s internal investigation services include: 

  • analysis of corporate documents, contracts with staff members, suppliers, customers, etc.; 
  • legal due diligence of the company; 
  • interviews with staff members and representatives of suppliers, customers, etc.; 
  • assistance with the pre-trial resolution of possible disputes; 
  • legal support of the judicial resolution of disputes that may arise as a result of an internal investigation. 

In addition, the involvement of attorneys in the conduct of an internal investigation can make it possible to include the information on the investigation results in the advocatory secret. This is an additional remedy against such data disclosure. 

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