Enron Ethics

The collapse of Enron followed an internal collapse of ethical standards, oversight that failed in its role, and a general love of wealth which permeates the culture; all of which this article from Harvard Business Week examines.

An excerpt:

"In the end, Enron was at the center of a truly delinquent society. Once Enron's ethical drift took hold, its collapse was only a matter of time," says HBS professor emeritus Malcolm S. Salter. As he explains in this Q&A and in his new book, Innovation Corrupted: The Origins and Legacy of Enron's Collapse (Harvard University Press), the devastation of Enron was total—yet there is much that business today can gain from a postmortem of the once-triumphant company.

“Salter had access to an extensive library of public information, including volumes of technical analyses and sworn testimonies in court documents, sources that were not yet available for earlier books on Enron. In addition, he interviewed former Enron executives and acquired internal Enron documents, which extended and deepened his research.

"Earlier descriptive narratives of Enron's collapse either downplay or fail to analyze the utter breakdown in board governance and Enron's internal controls, and the failure of credit rating agencies to blow the whistle," he says. "They also overlook the collusion of investment banks in misrepresenting the true financial condition of Enron, the inattentive regulatory agencies, and the absence of Enron's ethical discipline while choosing to live in the murky borderlands of the law."