Employee Allegiance: More Challenges For Companies To Safeguard IP, Proprietary Know How, and Trade Secrets!

Michael D. Moberly   February 6, 2009

More challenges lie ahead for companies to sustain control, use, ownership, and value of their intangible assets, IP, trade secrets, and proprietary/sensitive information.

First, I want to say this post is directed to those individuals/practitioners’ receptive to examining research that has a bearing on managing – mitigating the rising risks/threats posed by insiders to companies, as I have addressed in numerous (previous) posts at this blog.

Second, for those readers unfamiliar with PERSEREC (Personnel Security Research Center), it is a relatively small, non-descript arm of the DoD, headquartered in Monterrey, CA that houses an extraordinary group of highly focused researchers committed to conducting a broad range of, often times, collaborative research, on matters related to ‘personnel security’, the product of which is primarily directed to DoD and various entities within the U.S. intelligence community.

In a recent report produced by PERSEREC titled ‘Allegiance in a Time of Globalization’ (Defense Personnel Security Research Center, Technical Report 08-10, December, 2008) Katherine Herbig provides readers with much needed, in my judgment, insights, perspectives, and facts regarding the single concept of ‘allegiance’. One reason I am interested in Herbigs’ research on ‘allegiance’ is that I am currently facilitating two groups of highly experienced security practitioners whose mission it is to serve as a ‘reality check’ for an ‘insider risk audit tool’ (prototype) being developed by PERSEREC.

‘Given the current context of globalization,’ Herbig suggests, ‘questions about how to assess, investigate, and adjudicate allegiance are of increasing concern’. While Herbig suggests these ‘concerns’ are of relevance to the personnel security community and counterintelligence agencies, I might also add those same ‘concerns’ have relevance to the private sector particularly insofar as protecting – preserving intangible assets, proprietary/sensitive information, intellectual property, and trade secrets.

But, as Herbig points out, ‘allegiance is increasingly difficult to assess in the context of globalization’, that is to say, ‘since 1990, more countries are offering dual citizenship to those who immigrate and naturalize elsewhere, trying to bind their citizens to the countries of origin’. Such practices have, in turn, allowed larger numbers of people to ‘collect dual or multiple citizenships’, which, according to Herbig (and, I agree) serve ‘to dilute the meaning of citizenship and allegiance’!

It’s not difficult then to project even more complex challenges will lie ahead in terms of companies being able to consistently and effectively safeguard their intangible assets, trade secrets, sensitive/proprietary information and intellectual property globally, and in any business transaction.  This takes on, in my view, even greater significance when considered in light of the economic fact that today, 70+% of most company’s value, sources of revenue, and future wealth creation (sustainability) lie in – are directly linked to intangible assets and IP not tangible (physical) assets.

When Herbig’s work is examined in parallel with the findings of a 2005 PERSEREC study (below) it conveys yet more challenges that lie ahead insofar as companies being able to consistently safeguard their sensitive information, i.e.,

– Growing numbers of employees have/retain emotional, ethnic, and financial ties to other countries fostered by technologies that allow global communication that serve to sustain those ties, one product of which is less inclination to seek U.S. citizenship…

– Fewer employees are deterred by a traditional sense of (employer) loyalty. More inclination to view theft of information assets (espionage) to be morally justifiable if sharing those assets will benefit the world community or prevent armed conflict…

– Greater inclination for employees engaged in multinational trade/transactions to regard unauthorized transfer of information assets or technology as (a.) a business matter rather than (b.) an act of betrayal or treason…

– Growing allegiance to the/a global community, i.e., increasing acceptance of global as well as national values. Tendency to view human society as an evolving system of ethnically and ideologically diverse and interdependent people making illicit acts easier to rationalize…‘Technological, Social, and Economic Trends That Are Increasing U.S. Vulnerability To Insider Espionage’ Defense Personnel Security Research Center Lisa A. Kramer, Richards J. Heuer, Jr., Kent S. Crawford Technical Report 05-10 May, 2005 International Journal of Intelligence and Counterintelligence as ‘America’s Increased Vulnerability to Insider Espionage’ (20: 50-64, 2007)



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