Who Should Investigate The Cause Of A Corporate Crisis?
A bus carrying members of the World Health Organization (WHO) team investigating the origins of the ... [+] Covid-19 pandemic leaves the airport following their arrival at a cordoned-off section in the international arrivals area at the airport in Wuhan on January 14, 2021. (Photo by NICOLAS ASFOURI / AFP) (Photo by NICOLAS ASFOURI/AFP via Getty Images) AFP via Getty Images  An often overlooked part of dealing with a disaster, scandal or other emergency is the importance of deciding who will investigate the cause of the crisis. A lot will be riding on the answer in terms of the credibility, perception, and the results of the inquiry and the steps that are taken to ensure the crisis is not repeated. That is certainly the case with the pending investigation into the coronavirus crisis. Last week the Associated Press reported, As the World Health Organization draws up plans for the next phase of its probe into how the coronavirus pandemic started, an increasing number of scientists say the United Nations agency isn't up to the task and shouldn't be the one to investigate. Numerous experts, some with strong ties to WHO, say political tensions between the U.S. and China make it impossible for an investigation by the agency to find credible answers.  Lynn Neils, a former in-house lawyer at Johnson & Johnson, is now a partner at the Baker Botts law firm where she represents companies and individuals on matters related to internal investigations. She said, How the company responds to and investigates the causes of the crisis can have far-ranging implications for the company and the perception of the investigations independence.  When To Hire Outside Experts  Neils advised that, Corporations or other entities should in most instances hire outside experts particularly outside counselto lead the investigation of a corporate crisis. She cautioned, Not every allegation of wrongdoing at a company needs to be investigated using outside resources, but one that amounts to a corporate crisis suggests conduct that could seriously impact the reputation, and even the viability, of the company. If the investigation is conducted by outside counsel that is independent of the company, that helps increase confidence that the findings are accurate and helps bolster the perception that the company is doing what it can to uncover any wrongdoing and remediate the issues. Using outside counsel also helps to ensure that the investigation, and its findings, are subject to the attorney client privilege and work product protections, she counseled. 3 Benefits For Using Internal Resources  Neils said using in-house resources to conduct crisis-related investigations will:  Be less expensive for the company. The cost of outside counsel and forensic services, for example, can be very high. Likely be faster. In-house resources understand the business and do not need to get up to speed on people and issues. Can often be less intrusive. They are people that company employees already know and will be more sensitive to the business interruptions; but using only in-house resources can lead to allegations of bias or a cover-up. Assuring Independence  Retired Judge Robert Holzberg leads the investigations practice at the Pullman & Comley law firm. He said, The principal reason for retaining outside experts or counsel is to assure the independence of the investigation and to instill confidence in the public and the corporations stakeholders that the investigation is indeed thorough, impartial and free of any taint of influence by the companys officers or directors. While it is likely the case that an investigation by the corporations HR or legal department will be less expensive it is also the case, repeatedly demonstrated by ample historical experience, that the report will be attacked as biased with a predetermined outcome, Holzberg said. Outside counsel or experts are in a superior position to insist on full access to records, personnel and policy and internal deliberations that almost always are critical to the integrity and credibility of the final investigative report, he advised. Optics Are Important  Dara Tarkowski, the managing partner of Actuate Law, noted that, The events that trigger an investigation into a corporate crisis often involve sensitive issues that,if not handled properly on the front end, can lead an organization into further turmoil and even worse create liability where none may have existed before. During a crisis, optics are important, messaging is important, but before a company dials its PR agency, a call to outside counsel is in order.  She said this is important for several reasons. Scope  Outside counsel will assist you in determining the proper scope of your investigation, regardless of who ends up conducting it. Scoping your investigation properly is critical to establish defensibility and to ensure a company gets to the bottom of whatever is going on. Protection  If you need to hire third parties, like a forensic expert or a crisis communications firm, consider engaging outside counsel first in order to protect your communications, analysis and findings from discovery. Properly engaging outside parties to assist in an investigation can afford a company the benefits of attorney-client privilege and work product protections. Credibility  The use of outside and disinterested experts can demonstrate the credibility of an investigation and the objectivity of the results. Risks  Simply utilizing internal staff can be very risky. More often than not, companies get into even more trouble when internal staff operate without the proper direction of counsel. Internal staff are typically not trained for investigatory work and innocent missteps can do far more harm. Communications  You must communicate with your board of directors and/or relevant committees in a timely and proper manner. The adherence to such corporate formalities will support the defensibility and credibility of your investigation.