Enron lapses and corporate ethics
New questions surface about corporate leaders as Kenneth Lay testifies before Congress today.
HOUSTON AND NEW YORK
One of the hotter items at the moment on e-Bay, the online auction service, is a 64-page paperback that won't be mistaken for a Stephen King novel. Or perhaps it will. It's the Enron corporate code of ethics. "Never been opened," proclaims one seller, a former employee.
The dark humor surrounding the book points to a larger issue in the wake of the company's spectacular collapse: the state of business ethics in America.
And former Enron chairman and chief executive Kenneth Lay's sudden refusal to appear today before a congressional committee does little to quiet new questions that have surfaced about the ethical rigor of America's CEOs, in particular, and how much money they make.
Much of the new scrutiny stems directly from the Enron case and the very public way in which it is being played out. Yet the impact is usually magnified when it comes at a time of economic downturn.
"I think a lot of CEOs are down on their knees right now, thankful that Enron got caught before they did," says Marianne Jennings, a professor of legal and ethical studies at Arizona State University in Tempe, Ariz.
Neither Enron's standing nor the larger focus on business practices will be helped by a report released over the weekend by an internal Enron committee. It concluded that company executives intentionally manipulated Enron profits and reaped huge personal gains in the process.
Perhaps worse, it outlined a culture of deception and self-enrichment that permeated the highest levels of management.
Inevitably, a landmark corporate scandal, which Enron has quickly become, tends to force businesses to reexamine their behavior. In the 1980s, for instance, many companies vowed to change their practices concerning insider trading after a series of scandals erupted on Wall Street.
In the 1989, corporate chieftains professed their interest in being better environmental stewards after the Exxon Valdez oil spill in Alaska. The tragic leak of a poisonous gas at a Union Carbide plant in Bhopal, India, killing at least 2,500, brought similar promises of better corporate "citizenship."
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