Enron: The Smartest Guys in the Room / Lack of Ethics
Enron at one time was a Fortune 500 company, but in truth it was just a fallacy and a lie for what it truly was, an ethically bankrupt company that eventually became a bankrupt company. Henry Taylor, a 19th century statesman wrote “Falsehood ceases to be falsehood, when the truth is not expected to be spoken”. Enron senior management gets a failing grade on truth and disclosure. The purpose of ethics is to enable recognition of how a particular situation will be perceived. It is recognized that a certain amount of puffing, exaggeration, and bluffing is part of the business game. When does it become a problem that your ethics don’t even matter anymore and you break major rules of ethics?
Ken Ley and Jeffrey Skilling are at the top of the list of liars and deceivers in what is one of the biggest business scandals in the history of modern business. But they are not the only ones to be blamed, even though they were the leaders. Accountants, financial institutions, and financial analysts role is to serve shareholders and potential shareholders in rectifying the information asymmetries that exist when shareholders deal directly with the company. Enron’s accountants, including Arthur Anderson, and many Wall Street analysts ratified and legitimized the company’s scenarios and statements regarding its prospects.
I also could not believe a business as big as Enron would even allow for a conflict of interests to evolve. I have no idea how The Enron board “waived” the company’s own ethics code requirements to allow the company’s CFO to serve as general partner for the partnerships that it was using as a conduit for much of its business. Regardless, it was a horrible decision and a show that all Enron really cared about in the end was the almighty dollar.
The biggest lack of ethics of all is that Ley and Skilling didn’t have the guts to be able to take responsibility for their actions. The belief that a leader...
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