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It’s time to assess your reporting and investigations protocols

Rebecca Walker (rwalker@kaplanwalker.com) is a partner in the law firm of Kaplan & Walker LLP, based in Santa Monica, California, and Princeton, New Jersey, USA.

Reporting and investigations systems are critically important components of a compliance and ethics program. Indeed, according to the U.S. Department of Justice and the Securities and Exchange Commission, “The truest measure of an effective compliance program is how it responds to misconduct.”[1] Whether an organization’s response to misconduct is the truest measure of an effective compliance program is subject to debate. However, it is beyond doubt that robust systems to encourage reporting and to investigate allegations are essential to an effective program. They are also highly probative of a company’s commitment to compliance.

The European Union (EU) Directive 2019/1937 (Whistleblower Directive), which is required to be transposed into national law by EU member states by December 17, 2021, highlights not just the importance of protecting whistleblowers from retaliation, but also places a spotlight on robust reporting and investigations. For any organization, these developments present an excellent opportunity to review reporting and investigations procedures, consider relevant standards and best practices, and make appropriate enhancements.

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