Amid speculation the government was launching an inquiry into its options granting practices, Monster Worldwide Inc. began conducting an internal probe into the matter in June of last year. The company retained outside counsel and placed a committee of independent directors in charge of leading the investigation. Later that same day, the U.S. Attorney's Office for the Southern District of New York subpoenaed the company.
Soon after, former CEO Andrew McKelvey resigned. Then on Nov. 22, the company fired General Counsel Myron Olesnycki.
But impartiality isn't the only benefit outside counsel provide, according to forum participants. Installing outside counsel as lead investigators also increases the likelihood of preserving attorney-client privilege.
"While both the attorney-client privilege and the work product doctrine can apply to the work of an in-house attorney, having outside counsel conduct the investigation mitigates the risk that a court will find that a business purpose was the primary purpose behind the investigation," Reinberg said.
Even when the guilty party is a corporate executive, companies shouldn't hesitate to penalize them, according to attendees. Shielding a company head from reproach sends a message to the rest of the employees that some are granted special protections.
"Responding appropriately to scandal can help avoid damage to the company's reputation," Reinberg said. "That includes sanctioning a CEO for something he or she did."