Internal Investigations, Whistleblowing and External Monitoring: Comparative Experiences, Economic Insights, Findings from Corporate Practice

Abstract

Internal investigations, whistleblowing and external monitoring, are three information and enforcement channels and part of the corporate compliance system. As they relate to corporate management’s core area, they are a task of the general management or the (management) board. Internationally, some of these practices are already considered to be good corporate governance. Unsurprisingly, there is extensive experience in many countries, although little empirical evidence of their effectiveness exists.

Nonetheless, prominent cases have shown that national requirements, especially from the U.K. and U.S., tend to have extraterritorial effects. Therefore, the topic is of current importance for scholarship, legislation and corporate practice.

This article offers a comparative analysis of the situation in different countries, thereby considering many insights from economic knowledge and corporate practice as well as particularities and path dependencies. It focuses on the U.S., the U.K. and Switzerland, but also refers to other countries and recent developments in the European Union.

Keywords: corporate governance, internal investigations, whistleblowing, external monitoring, monitor, comparative law, compliance system, whistleblower directive, Sarbanes-Oxley Act, Dodd-Frank Act, Bribery Act 2010

JEL Classification: D23, G38, G34, K42, K20, M48