E-discovery on the agenda for China’s CEOs

Global companies are increasingly facing an overload of data. Experts forecast that there will soon be one trillion internet-connected devices in the world. The large volumes of information being created and stored are also putting pressure on companies’ IT infrastructure. Poor handling and storage of this data can potentially damage a company’s reputation and ultimately its balance sheet.

Investigations raise the stakes

Anti-bribery and anti-corruption investigations in China, Hong Kong and abroad are raising the stakes even further. Regulators expect robust investigative processes, and the discovery and production of documents in response to documentation requests and subpoenas in ever-shortening time frames. Multinational companies with operations in the United States that run afoul of the US Foreign Corrupt Practices Act (FCPA), for example, frequently find themselves having to demonstrate that they have conducted a rigorous and meaningful investigation of the issues at hand to US regulators such as the Department of Justice and the Securities and Exchange Commission. Chinese companies seeking overseas listings or with outbound investments in highly regulated markets also need to prepare themselves for compliance with relevant antitrust, anti-bribery, data privacy and similar laws.

The challenge

This raises the question of the best way to navigate and analyse the sheer volume of corporate information maintained by businesses at home and abroad. The process of collecting and analysing the information can be a logistical nightmare with high human and financial costs. More information leads to greater potential liability, and each case forces companies to collect and analyse their potentially relevant information for documents specific to the issues being investigated. Collecting, culling, analysing, and producing the required information electronically is generically known as electronic discovery (e-discovery).

Grant Jamieson is a partner, forensic, at KPMG China