Such situations are particularly sensitive:

The individuals involved are both at the top of the organisation and the focus of the investigation. The public, investors and authorities expect transparency and consistency.

There is a high risk of unequal treatment or "protecting one's own people" which can further damage the company's reputation.

This is precisely why it is clear that companies must not wait until such a case has already escalated before looking for a course of action. They need pre-defined, transparent processes for dealing with allegations against top management. After all, governance is not demonstrated by ad-hoc crisis rhetoric, but by preparation and transparency.

What might such a process look like?

Ideally, a professional approach should be based on three pillars:

1.  Define clear responsibilities

• Which authority decides whether to open an investigation (e.g. the chair of the board of directors or a special board committee)?
• Who is responsible for selecting an independent investigator?
• What role does the compliance office play when it comes to the top level of the company?

2.  Ensuring independence

Internal structures alone are often not sufficient when it comes to the CEO or CFO. In such cases, external investigators (e.g. specialised law firms) who are free of conflicts of interest are required.

Special governance rules can be established for board members, such as the remaining board members appointing a special committee.

3.  Prepare transparency and communication

A communication plan must already be in place: Who informs employees, investors and, where relevant, supervisory authorities, when and how?

Silence breeds speculation. Prepared guidelines help to strike a balance between confidentiality and necessary disclosure.

Exemplary procedure in practice

A multinational corporation could outline the following procedure:

• Receipt of allegations against a C-suite member → the report is registered by the internal reporting office.
• Initial assessment by a board committee → if plausible, automatic trigger for external investigation.
• Appointment of an independent investigation team → law firm with a clearly defined mandate.
• Interim measures → depending on the severity, the executive concerned is temporarily suspended.
• Regular reporting to an independent body (e.g. audit committee), not to the CEO/CFO themselves.
• Final report and measures → publication of an abridged report or summaries to ensure transparency.

Why prepared processes are a competitive advantage

• By demonstratating that they do not apply double standards, even to their own top management, companies protect themselves against legal and reputational risks.
• Strengthening corporate culture: Employees perceive that ‘tone at the top’ is not just an empty phrase, but also applies to senior management.
• Protection of trust vis-à-vis authorities and investors: Prepared structures have a de-escalating effect, as they show that the management of the crisis was prepared and not decided on a mere ad-hoc basis and handled professionally.

Conclusion

Compliance is no longer a ‘bottom-up issue,’ but rather concerns the heart of corporate governance. Defining clear, transparent processes for dealing with allegations against top management builds trust, reputation and – in serious cases – the ability to act.

The real question is therefore not whether allegations will ever affect the C-suite level, but when – and whether a company will be prepared when they do.