Board Oversight in Action: Navigating Investigations and Mitigating Penalties

The SEC and DOJ are imposing record-breaking financial penalties to hold wrongdoers accountable for misconduct, while also offering credit to those who proactively self-monitor, self-report, and remediate misconduct.

As highlighted by recent cases, internal investigation procedures and remedial actions are commonly cited as key factors related to the regulator’s view of cooperation and the determination of reduced penalties.

Boards must ensure the company has established protocols and resources to identify, investigate, discipline, and remediate violations of laws, regulations, or company policy.

Conducting a timely and thorough internal investigation can demonstrate to regulators the Board’s commitment to compliance, potentially helping to avoid or reduce penalties and support a healthy compliance culture.

Where misconduct is identified, the board must determine suitable corrective measures and establish an action plan.