The recommendations of the Conference Board on Corporate Governance presuppose the existence and regular use of Internal Investigations. The recommendations explicitly state that internal investigations should, in principle, be conducted by independent investigators (especially lawyers, but also accountants), as long as they also concern the behavior of company executives.
The independent investigators appointed by the Board should also report directly to the Board. Care should be taken in their selection that they are not law firms with whom the company cooperates on a regular basis, since
there are doubts about a thorough and objective investigation of the incidents, especially if the firm in question regularly receives high fees.
In addition, Internal Investigations may arise from the general due diligence obligations of a Board Member or Director. From the general Duty of Care, case law and literature in cases of suspicion have developed the duty of the Board of Management to clarify the underlying facts; From this, the obligation to carry out an internal investigation should also be carried out.
Transparency International’s Principles for Countering Bribery, published in 2009 for the second time, presuppose an effective system of internal control to combat bribery within the corporate compliance
system, which needs regular review and adjustment. While not explicitly mentioning Internal Investigation on incidents reported by whistleblowing staff, it also highlights the need to make anti-corruption compliance a “matter of priority”. In addition. It is also recommended to consider whether a review may also be useful from an “external perspective”.
The Rules of Conduct of the International Chamber of Commerce (ICC) also include corporate-related anti-corruption recommendations. An explicit mention of Internal Investigations as a means of clarifying and for the future exclusion of the compliance breaches revealed by this is not found here. Nonetheless, the ICC’s recommendations on Independent Systems of Auditing and on an ongoing review of compliance, including anti-corruption behavior, by the Audit Committee make the company’s internal
investigations at least an option.
Even according to the Business Principles for Countering Bribery of the World Economic Forum’s Partnering Against Corruption Initiative (PACI), there is no explicit recommendation on Internal Investigations for evidence of compliance violations. Rather, it generally indicates the need to implement an effective anti-corruption program in the compliance system that requires periodic review.
Practical recommendations for dealing with allegations of corruption or obvious cases of corruption can be found in the context of international tenders for infrastructure projects on the website of the Global Infrastructure Anti-Corruption Center (GIACC). F Internal Investigations also play a role here. The Dealing with Corruption chapter clearly requires the instrument of Internal Investigations to detect sufficiently concrete suspicions. Among other things, the company is recommended to gather all facts and evidence first. Above all, such an investigation should be unbiased. The publication then deals critically with the reporting of corruption incidents, since various conflicts of interest can arise here.
Antitrust and competition law
Antitrust collusion between companies is severely sanctioned by both national and international legislation. The fines imposed by the European Commission are considered to be the highest in the world. National legislation often allows it to be sufficient for a cartel to extend to a domestic market, although the cartel agreement has also been concluded abroad. This extra-territorial application of the law represents an incalculable risk for many companies, as, among other things, fines of unimagined amounts are threatened. Irrespective of this, when price agreements are made known, there is always a threat of international loss of reputation.
A specific incentive for companies to investigate and disclose antitrust violations and cooperate with the antitrust authorities is the leniency notice for cartel cases issued by the EU Commission and the
Bundeskartellamt bonus scheme.
According to the EU Leniency Notice, the Commission grants, on application, the full immunity from fines if a company is the first company to provide evidence of a cartel previously unknown to the EU Commission or, in the case of the Commission’s knowledge, provides conclusive evidence supporting the finding of the cartel enable. In the absence of any right to full immunity, the Commission is proposing a reduction under the Leniency Notice if evidence is presented to the Commission which represents significant added value.
According to the bonus regulations of the Federal Cartel Office, a cartel member can reduce the anticipated fine by half or even waive it altogether. The precondition is that the party concerned first appeals to the Bundeskartellamt before it has sufficient evidence to obtain a search warrant or to prove the crime. The cartel participant must provide the evidence by oral or written information and must not have played a major role in the cartel. In both cases, both at European and national level, full
cooperation with the Commission or the antitrust authority is a rerequisite for benefiting from sanction mitigation or the full sanction decree.
The sensitive sanctioning framework provided by the Law on Restraints of Competition (GWB) can also motivate cooperation with the antitrust authorities: In addition to liability for damages, the law also provides for elimination of benefits by the antitrust authority or certain associations with legal capacity.
The Unfair Competition Act (UWG) contains similar rules for unfair commercial acts, such as deception, misleading or harassment of consumers.