11/25/2009 04:43:27 PM EST
Awareness Campaigns as an Element of the Compliance Program
Article 9, provides that a security interest continues in collateral notwithstanding sale or other disposition of the collateral unless the secured party authorized the disposition free of the security interest. A 2009 Third Circuit opinion faced the issue of whether the secured partys passive acquiescence in the debtors disposition of collateral could amount to an implied authorization of the disposition free of the security interest.
"Effective" corporate compliance and ethics programs require a well-designed awareness campaign to inform employees and others of the companys definition of and commitment to appropriate behavior, and of the various elements of the program. This is a complex emerging issue for multinationals, as different jurisdictions have different requirements.
Mr. Lauer writes: One aspect of compliance and ethics programs that often receives inadequate attention is the means by which a company "markets" or publicizes its program to internal and external audiences. Such programs include elements as diverse as hotlines, employee training, standards of conduct and audits of their effectiveness, among others. A well-designed "awareness" campaign ties the various elements of the program together. The proper design of an awareness campaign can provide the foundation for a successful program. A deficient campaign, on the other hand, might doom to failure a program that otherwise comprises well-designed and executed elements.
Several years ago, the consulting firm Deloitte conducted a survey on compliance practices. After reviewing the responses to the survey, the firm observed that a low percentage (i.e., 5.90%) of the survey respondents received calls over their reporting mechanisms (e.g., "helplines") from at least 1% of their employee populations. According to Deloitte, that "may mean that the existing helplines may not be effectively marketed or utilized. Worse case, it may indicate an unwillingness of the employees to utilize the program." See "Business Ethics and Compliance in the Sarbanes-Oxley Era," p. 5. Since many companies have spent considerable sums on their compliance programs, they should want to make those programs more effective.
The effectiveness of corporate compliance and ethics programs also appears as a more-frequent focus of legislation and regulatory initiatives. Thus, if they make their programs more effective, measured by how well those programs achieve the business objectives for which they were created, companies will better position themselves vis--vis those regulatory inquiries.