Code of Responsibility of an Association Member
All members of The ESOP Association should adhere to high standards of complying with all laws and regulations pertaining to ESOP creation and operation of ESOPs that are reasonable and accepted as standard practice by the ESOP community.
Thus if a Court of law, or an agency with enforcement powers over the creation and operation of an ESOP, issues a decision or ruling that an ESOP company or service provider has clearly, and knowingly violated generally accepted practices that comply with ESOP laws and regulations governing ESOPs, and the Court or agency issues an order that prohibits the ESOP company member from maintaining an ESOP, or bars an official of the company from being a fiduciary of the company’s ESOPs, or a Court or agency issues an order that bars a service provider member from selling her/his services to anyone, or any entity involved with creating or operating an ESOP, the Association member may have its/his/her membership in the Association terminated by the Association’s Board of Directors.
The Board’s action is not to be taken until after the corporation or person subject to the Court’s or agency’s decision is given an opportunity to explain its/his/her view that the Court’s or agency’s ruling is not supported by precedent, or was contrary to standard practice of ESOP companies and service providers selling services to ESOP companies or to other parties involved with creating and maintaining an ESOP. The Association member that is subject to the Board of Directors’ review can demand that it/she/he present its/her/his views in person to the Board, or by written communication. The same party can also waive the demand for an opportunity to present its/his/her view of the Court’s or agency’s decision.
The above is adopted by the Board of Directors on November 12, 2016, and is effective, January 1, 2017, with regard to decisions by a Court or agency after the effective date.