This is important, because it will serve as basic guideline, outlining what activities are most acceptable in the workplace. (Izraeli, 2010) Oversight is when the corporation is ensuring effective supervision of employees and executives through: the different managers as well as the board of directors. This is important, because it is establishing a system of checks and balances inside the organization. (Izraeli, 2010) ("The Principals of Federal Prosecution of Business Organizations," n.d.)

The delegation of authority is when managers and the board are watchful of the actions of those individuals (who have increased amounts of influence). This is important, because it places special emphasis on monitoring those people, who are given extraordinary powers within the company.

Effective communication standards / procedures are when the corporation maintains and is building communication at all levels. This is accomplished by having various procedures in place, to ensure that the company is maintaining these high levels. (Izraeli, 2010)

Auditing / monitoring are when you are establishing various mechanisms that will ensure compliance (such as: an anonymous hotline). This is important, because the different tools that are in place, will report when such violations that are occurring. (Izraeli, 2010)

The enforcement of discipline is when you are ensuring that anyone who violates the policy will be held accountable for their actions (regardless of their status in the company). This is important because, it will make certain that everyone is following the various compliance procedures (by allowing no one to be above the basic...

(Izraeli, 2010)
An effective response of various breaches that have occurred is when the company will apply the possible infractions of the policy on a case by case basis. Where, they will take less severe disciplinary action against those, who violate these provisions. This is important, because it will ensure that the response for the various breaches, takes into account the circumstances surrounding the event. (Izraeli, 2010)

When you step back and analyze these different elements, it is clear that they are providing a basic foundation for corporations to establish effective compliance procedures. As a result, one could easily infer that this is a major reason why the Caremark case is: holding corporations and the board of directors accountable to a new standard. Where, various infractions of these basic procedures have highlighted that some kind of legal interpretation is necessary, to ensure that the actions taken by employees are carefully monitored at all times. This is significant, because it shows how the courts are addressing various areas of confusions that were often used as loop holes. This has allowed many individuals and organizations to go around federal sentencing guidelines, when establishing their ethical polices / procedures.

Bibliography

The Principals of Federal Prosecution of Business Organizations. (n.d.)

Izraeli, D. (2010). What we can Learn from Federal Sentencing Guidelines. European Institute for Business Ethics. Retrieved from: http://actrav.itcilo.org/actrav-english/telearn/global/ilo/code/whatcan.htm

Walker, R. (n.d.). Board Oversight of Compliance Program.