The globalization of business has had a profound impact on companies when they face allegations of wrongdoing. In today’s business environment, a U.S.-headquartered company often has operations in dozens or more countries, some of which may have a reputation of being more susceptible to corrupt business practices. When allegations of possible misconduct or concerns surface, they often give rise to the need to conduct an investigation. In the current environment, the trail of evidence in those investigations can extend around the globe. Moreover, in recent years scrutiny by regulators and stakeholders into the propriety of business practices has intensified and broadened. Interactions with government officials, potential collaboration with competitors in violation of antitrust regulations, global tax minimization strategies and financial reporting practices are just some of the areas that can require investigation. Regardless of the type of alleged misdeed, investigations involving overseas operations can be particularly challenging.
Identifying the Risks
Investigating specific corruption allegations in a particular country is one thing. Addressing the inevitable board member or regulator question of, “Where else in the global operations might there be a similar problem?” poses substantial additional challenges. Usually, a comprehensive investigation into transactions across all geographies is neither practical, nor necessary.
