The most effective way to achieve this is as follows:
Fire everyone.
Shut down the business.
Seriously. This is the 21st Century, and digital technology is pervasive. Source code is the simplest form of information to move around: ASCII text files. And are you seriously going to tell me that developers stop talking shop when they go home? I know I don't. I'm mulling over problems, algorithms, requirements, deadlines, and all that other whatnot. Do I share it with competitors? Hell no.
But my point is that intellectual property isn't at risk just because we've stepped away from our keyboards. Preventing the theft or distribution of software is a futile effort; you might as well shove gags down everyone's throats while you're at it.
Whoever is behind this idea needs to seriously rethink what it is that they're trying to achieve here. The more barriers you erect between a developer and the tools he needs to get his work done, the longer it will take him to deliver the product. Time to market is everything these days, especially in this economy. And no manager who wants to keep his job wants to be the guy who has to explain that the product is X months late because he erected insurmountable obstacles that prevented his teams from getting their work done.