Public distrust in the wake of corporate scandals caused corporate legitimacy crises for the companies involved and for the marketplace as a whole. The loss of trust has contributed to an environment in which traditional responses to allegations of wrongdoing and incompetence are less effective. Alternatively, organizations engage in "Public independent fact-finding" ("PIFF") by hiring public figures with reputations for integrity to conduct internal investigations and to report their findings to the public. This Article describes the role played by trust, reputation, and social legitimacy in the health of organizations and examines corporate legitimacy crises and traditional responses. Identifying factors that undermine the effectiveness of apologia and other trust-generating institutions, it explores PIFF as an alternative process and considers the benefits and inherent problems of attempting to institutionalize the process better. Focusing on lawyers as fact finders and the American Arbitration Association's new Independent Fact-Finding Service, it analyzes the procedural and ethical issues associated with possible institutionalization models. The authors assert that procedures should ensure the integrity of the process. Ultimately, the public trust in individuals and entities and in the processes in which they engage is a precious commodity for institutions in crises. In turn, their reputations are a public good. Such fact finders are essentially "trustees" with corresponding fiduciary duties, and it is essential to conduct these processes to preserve the public's confidence. Although not a panacea, the PIFF concept may provide a quick, fair, and objective intervention to resolve controversy based on rumor and innuendo. In a global society in which public opinion changes rapidly, fact-finding fills a void in dispute-handling processes between the formal application of law and the informal shaping of public opinion.
R. William Ide III and Douglas H. Yarn,
Public Independent Fact-Finding: A Trust-Generating Institution for an Age of Corporate Illegitimacy and Public Mistrust,
56 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol56/iss4/3