BOARD OVERSIGHT IN SPECIAL COMMITTEE INVESTIGATIONS

R&C: What developments are most significantly changing how boards of directors oversee special committee investigations today?

Canova: Boards today are overseeing special committee investigations in a more complex environment – shaped by expanding whistleblower activity, increased civil litigation, an evolving regulatory agenda, frequent and complex cyber and data privacy incidents, as well as heightened expectations associated with independence, documentation and disclosures. Specifically, recent Securities and Exchange Commission (SEC) enforcement trends, Department of Justice (DOJ) guidance and case law have all prompted boards to respond with greater urgency, document oversight more carefully and demonstrate independence in appearance and in fact. Boards are also under growing investor and stakeholder expectations to demonstrate that investigations are not simply reactive exercises, but rather critical to broader corporate governance and prospective risk management. Consequently, oversight is becoming more structured, with clearer protocols for escalation, counsel and adviser selection, reporting lines and remediation.

Eichenberger: The SEC’s recent policy reforms have greatly impacted board-led investigations. Under Gary Gensler, former chairman of the SEC, the agency was focused on ensuring that ‘gatekeepers’ protected market participants from corporate fraud. This created an adversarial dynamic where board members who did not adequately investigate potential red flags faced SEC enforcement. What we are seeing under the lead of Paul Atkins, current chairman of the SEC, is different. Independent, board-level investigations are still tremendously important, but the incentives, and the mandate, are different. The SEC has made clear that companies are more likely to receive lenient treatment if they conduct credible inquiries and promptly report any misconduct. Because staff are placing a premium on independent investigations, boards overseeing special committee investigations are laser-focused on structuring independent, fact-driven processes that will withstand SEC scrutiny.

Jul-Sep 2026 Issue

BDO

Gibson Dunn

Katten Muchin Rosenman LLP