Five questions boards should ask before an internal investigation

When an allegation of misconduct reaches the board, the pressure to act quickly is understandable. Yet the first decisions shape everything that follows, and five questions deserve an answer before any interview takes place: who is the client, what is the scope, how will privilege be protected, who needs to be told, and what will happen to the findings?

Clarity about the client matters most. An investigation commissioned by management into conduct that may involve management is unlikely to be trusted by a regulator or by shareholders. A committee of independent directors, with its own counsel, avoids that difficulty and gives the conclusions weight.

Scope and reporting deserve equal care. A narrow mandate can be widened as facts emerge; an unfocused one is slow, costly and hard to defend. Agree in advance how findings will be recorded, whether a written report is needed, and how the board will decide what, if anything, to disclose to the authorities.