In the face of whistleblowers, tone at the top of the company has never been more important. So is the board’s role in both overseeing and monitoring the culture of an organization.
In a webinar, sponsored by Jim Kristie of Directors & Boards magazine and
the law firm Morvillo Abramowitz, Barry A. Bohrer and Richard D. Weinberg
discussed “Internal Investigations 2011: What Directors Need to Know.”
In light of the new SEC rules that reward whistle-blowers with rich bounties,
the renowned attorneys stressed the need for strong compliance programs and a
corporate culture that encourages employees to report problems early.
Weinberg suggested that boards consider “prepared preliminary action plans,”
which could include how the board would handle an internal investigation,
vetting outside attorneys and forensic experts in advance and discussions about
whether they would delegate oversight of the investigation to audit or a
How the board handles the investigation is critically important in terms of
disciplinary action. Did the organization self report? Did they handle the
investigation expeditiously and credibly? Did they engage independent
help in the form of advisors, attorneys and forensic specialists?
Shareholders, employees and the public are watching.