THAILAND Trends and Developments Contributed by: Nam-Ake Lekfuangfu, Theeranit Pongpanarat, Praween Chantanakomes and Panitan Pruksakasemsuk, Baker McKenzie
Therefore, companies should prioritise the develop - ment and implementation of robust internal controls, regularly review their effectiveness, and foster a cul - ture of accountability to mitigate risks and bolster their defences against such misconduct. Legal exposures and requirements arising from fraud, corruption and compliance violations The legal risks associated with fraud, corruption and compliance breaches may potentially extend beyond the immediate organisation. When person - nel engage in such misconduct, the ramifications are not limited solely to internal disciplinary actions or financial consequences of the organisation. Instead, these actions can trigger significant legal exposure and requirements for the organisation itself towards a wide range of stakeholders, including customers, regulatory agencies, suppliers, employees subject to disciplinary actions themselves, and any other parties affected by the perpetrators’ misconduct. Affected stakeholders may pursue legal action not only against the individual perpetrators but also against the organisation itself – eg, if an employee’s miscon - duct also results in a breach of contractual obligations toward customers or suppliers. This heightened risk arises from the principle that companies can be held legally accountable for the actions of their employees, especially when those actions result in harm to other parties or regulatory violations. Consequently, legal proceedings and sanctions may be initiated against companies, further compounding the severity of the original misconduct. Given these implications, it is crucial for organisations to maintain comprehensive oversight when managing incidents of fraud, corruption and compliance viola - tions. Companies should evaluate both the immedi - ate and broader consequences of their personnel’s actions. By doing so, they can ensure that appropriate and timely measures are taken to address the issues, mitigate potential fallout and fulfil their obligations to all affected stakeholders. Business continuity risk arising from investigation outcome An investigation and its outcome can become more complex when senior executives, key employees or a
large number of employees are involved. Companies may have to pay close attention to business continuity plans, such as succession plans or the replacement of workforce, as the outcome of a disciplinary investiga - tion may lead to the suspension or termination of high- level management, key employees or a large number of employees, which may cause significant business disruptions. Communication within and outside the organisation also plays an important role in this transition process, to ensure smooth and undisrupted business continu - ation. Clear, swift and consistent messaging helps to manage internal and external expectations, to main - tain employee, customer and stakeholder confidence, and to reduce damaging speculation. External counsel With these challenges, investigations are no longer viewed solely as mere internal disciplinary exercises. Instead, they are increasingly treated as critical com - ponents of corporate governance and risk manage - ment frameworks, to ensure that all issues and con - cerns are identified and properly addressed in order to minimise all associated risks as much as possible. In this respect, organisations are increasingly engag - ing external counsels for their investigation and out - come determination, whether for conducting inter - views, gathering evidence and witnesses, preparing investigation reports or for legal analysis and rec - ommendation when handling sensitive and complex matters such as corruption, fraud and compliance breaches. These cases sometimes involve complex legal issues and facts, as well as senior management, key employees or a large number of personnel, which may require substantial expertise and resources to be addressed properly in a timely manner. In addition, external counsels may bring objectivity, credibility and expert views to the process, ensuring that investigations are impartial and thorough. Their specialised capabilities (eg, forensic accounting and digital evidence review, comprehensive legal analysis and recommendation, and multi-jurisdictional inves - tigation skills) can be helpful in navigating the com - plexities of cases.
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