When corporate scandals occur, such as information leaks, compliance issues, and harassment problems, especially in the case of large-scale scandals that cause public concern, it is difficult to resolve them through internal investigations alone, and it is also difficult to gain public trust through a company's own investigations. A "third-party committee" is important to quickly and fairly investigate, determine the cause, and consider measures to prevent recurrence. This section provides basic knowledge about third-party committees, which investigate accurately from a neutral standpoint in order to regain public trust, and forensic investigations that support investigations by third-party committees.
A third-party committee is an organization established to investigate the causes of corporate scandals and other compliance violations and to take measures to prevent recurrence. It is not a permanent body, but is established on a case-by-case basis when corporate scandals occur. It is established on a voluntary basis by a company and is sometimes referred to as a "special investigative committee" or "independent investigative committee.
When a company is involved in misconduct, it is possible for the company to proceed with its own investigation without establishing a third-party committee. However, if the investigation is conducted only by management and employees, there is no way to dispel the risk of an inadequate response. The purpose of establishing a third-party committee is to restore public trust by conducting an objective and fair investigation by outside experts. By entrusting the investigation to a third-party committee composed solely of outsiders who have no vested interest in the company, the company can demonstrate to the public its sincere attitude toward preventing the recurrence of misconduct.
In the case of an internal investigation, a director in charge is appointed, and an internal investigation team of employees is formed under the direction of the director to conduct the investigation and compile an investigation report. Unlike a third-party committee consisting of experts and other concerned parties who are independent of the company, an investigation conducted by internal concerned parties can be conducted quickly because they know the actual situation of the company, but objectivity and neutrality may be questionable.
An "internal investigation committee" is organized around a company's management and audit department, but also includes outside experts such as lawyers. Compared to a third-party committee, an internal investigation committee has the disadvantage of lacking independence and neutrality as an organization. Especially in cases of top management misconduct, cases that require a high level of expertise to resolve, or cases that cause a significant loss of public trust, it is wise to establish a third-party committee in order to prevent suspicion of evidence destruction or concealment, and to ensure the objectivity of the investigation.
Since the client of a third-party committee is a company, it is difficult to maintain complete independence. In the past, some third-party committees have been found to be insufficiently independent from the companies and their attorneys' proficiency, resulting in findings that have drawn criticism. In response to this situation, the Japan Federation of Bar Associations established the "Guidelines for Third-Party Committees in Corporate Misconduct Cases" in 2010. Although there is no obligation to operate in accordance with the guidelines, third-party committees are now often established in compliance with the JFBA guidelines.
*"Guidelines for Third-Party Committees in Corporate Misconduct" (related link)
https://www.nichibenren.or.jp/library/ja/opinion/report/data/100715_2.pdf
In order to enhance the credibility of reports, an organization called the "Third-Party Committee Report Rating Committee" has been established, and it helps to improve the credibility of reports by third-party committees by rating them on a five-point scale from an independent standpoint and announcing them to the public.
The role of a third-party committee is to investigate and analyze the facts of corporate scandals and submit a report. It seeks disclosure of internal company documents, examines PC data, conducts interviews with employees, and otherwise cooperates with the company to determine the cause. The committee collects and analyzes evidence, identifies and evaluates the facts, and submits the results to the company. We also make recommendations on measures to prevent recurrence.
In order to conduct the investigation from a standpoint independent of the company, no one with a vested interest in the company can serve as a member of the third-party committee, which is an organization that ensures neutrality and independence. Even if the results of the investigation are unfavorable to the company or its management, they must be included in the investigation report, and the results must not be disclosed to the company or other parties prior to the submission of the report.
Cooperation from the company is essential for the third-party committee to proceed with its investigation. If the third-party committee requests cooperation or action, the company must fully comply. The company must provide access to all internal information, documents, and employees, order employees to cooperate with the investigation as part of their duties, and, if necessary, set up an internal secretariat. Any refusal to cooperate or any obstruction will be noted in the report of the third-party committee.
According to the guidelines of the Japan Federation of Bar Associations, the third-party committee should, in principle, have at least three members. The main appointed members and investigators are as follows
＜Main Appointed Committee Members
Lawyers (other than legal counsel)
Certified Public Accountant
Certified Public Accountants
Academic experts, journalists
Lawyers are often included in the appointed committee members because, in addition to the fact that legal issues are involved, they are skilled in hearing the subject matter, gathering evidence, and determining the facts in the course of their work. In the case of accounting-related misconduct, a certified public accountant or tax accountant is usually a member of the committee. Other committee members include academics in specialized fields or employees of research institutions, depending on the company and the case.
<Investigators
Lawyer in charge of investigation
Certified Public Accountant
Digital forensic investigation specialists
Since it is impossible for the limited number of members of a third-party committee to cover a wide range of investigations, the actual investigation is undertaken by the investigators requested by the third-party committee. Usually, lawyers, certified public accountants, and digital forensic investigation specialists are involved in the investigation, sharing information with the company's legal and risk management departments.
A forensic investigation is a forensic investigation conducted when an incident of internal fraud or information leakage occurs. The expertise of a forensic investigation specialist is essential to the investigation of misconduct by a third-party committee. Most forensic investigations are "digital forensic investigations," in which legal evidence is examined, searched, and analyzed from digital data stored on computers and other storage media.
As information has become increasingly digitalized in recent years, the analysis of digital data stored in e-mails, call logs, PCs, etc. is an important part of a misconduct investigation by a third-party committee. Forensic investigations that deal with such digital data are called "digital forensic investigations. A speedy digital forensic investigation by a professional investigation company is the key to an investigation before a company destroys or alters the evidence.
In a digital forensic investigation, after hearing the scope of the investigation, the company secures the devices to be investigated, if necessary, and analyzes the data that has been properly preserved and collected to prevent accidental deletion or destruction of digital data using specialized analysis tools to clarify and report the circumstances and evidence of misconduct, Know-how is indispensable for reliable investigations.
If a person who does not have the know-how conducts an inappropriate investigation, he/she may mishandle the data, resulting not only in inaccurate investigation results but also in the risk of secondary damage such as overwriting or corrupting the data.
Digital forensic investigation, which involves the collection and analysis of vast amounts of digital data, has its limitations when conducted by human labor alone.
Be aware that forensic investigations with complex and difficult processes can take a long time to produce results, and in some cases can be very expensive. An experienced investigation company that handles a variety of case patterns will likely be able to provide a detailed response that matches your company's case and lead to a solution.
When the need for a digital data investigation arises during a misconduct investigation by a third-party committee, consider requesting an investigation by FRONTEO, a leading digital forensic investigation company with an overwhelming track record. FRONTEO has extensive experience in investigating various types of cases, including information leaks, data falsification, embezzlement, labor issues harassment issues, and security matters. With a solid track record of more than 2,000 cases of digital forensics work handled, our know-how accumulated over the years has given us the ability to handle a wide range of companies and issues.
Since the AI engine and software are developed in-house, they can be flexibly customized for each company's proprietary systems and special data, allowing us to conduct the most appropriate investigation for each company and each case. This allows us to conduct research that is optimal for each company and each project. We provide a one-stop, precise approach to data identification, preservation, processing, review, and preparation of data for submission.
If the establishment of a third-party committee or forensic investigation is delayed due to a major scandal, leading to the concealment or destruction of evidence, public distrust will increase and the risk of enormous damage to the company will increase. Promptly establishing a third-party committee, conducting a forensic investigation, and announcing it to the public is the best way to restore corporate credibility while protecting employees. FRONTEO, with its overwhelming experience in forensic investigations, can handle data quickly and appropriately in the event of an emergency.