Are Boards Outsourcing Judgment in Workplace Investigations?

In an opinion article published in the Australian Financial Review last week, columnist Joe Aston argues that Allens’ handling of a whistleblower investigation at KPMG reflects broader weaknesses in how Australian companies use external law firms to investigate workplace conduct and governance concerns.

Aston writes that Allens agreed to a scope of work that included targeted searches of emails and other documents but ultimately decided not to conduct them. When KPMG later carried them out, it uncovered an email from former chief operating officer Eileen Hoggett inviting a colleague to “sensitively” inspect confidential Lendlease documents “without letting too many people know.” Liberal Senator Dave Sharma said there were “manifest inadequacies” in the investigation and questioned whether similar Allens work could be regarded as “credible and trustworthy.” One of the Allens partners involved rejected the criticism as “unfair.”

“Unlike in other types of legal work, rarely is the methodology of these investigations unmasked,” Aston notes. “The Parliament has done us all an enormous favour here by laying bare Allens’ incurious workmanship, which would otherwise have remained obscured by legal professional privilege.”

More broadly, Aston argues that lawyer-led workplace and governance investigations have become a lucrative feature of corporate Australia, particularly when companies are responding to whistleblower allegations, executive misconduct, or governance failures. He questions whether firms engaged by the company itself are well placed to provide genuinely independent scrutiny, and whether the legal process can sometimes become a substitute for boards confronting difficult issues directly.

Aston contrasts this with Amcor’s response to a 2004 cartel scandal, when Chairman Chris Roberts personally investigated the allegations over a weekend and the board accepted the immediate resignations of the CEO and another senior executive. “[W]hen you boil it down, governance is judgement,” Aston concludes. “That is the job.” Directors, he argues, must do the work to form their own view, rather than asking lawyers to form it for them.