The rapid demise of the energy giant Enron echoed into the community of Wall Street. The customary elements of a major corporations downfall are automatically questioned: Were their assets overstated? Did the financial statements reveal all losses and gains? How much was the stock price inflated? Did Enron's external auditor, Andersen, know what was going on and to what extent? Though these are obvious concerns, what many are beginning to question are the ethics of the once-mighty company, or lack thereof. It appears a major share of the blame for the collapse may be due to the ethical climate in the company.
Despite the fact that Enron publicly refers to its Code of Ethics, it's actions state otherwise. Simply put, ethics is a set of values and rules that define right and wrong conduct. In the end, this was a hard concept for the major heads of Enron to grasp and follow. While on the surface, Enron appeared to have a top-quality system to implement its social values and commitment to environmental responsibility; you needed to turn past the cover of this book to reveal the true story. It's Code of Conduct states that "business is to be conducted in compliance with the highest professional and ethical standards." (Enron Corporation 2001 Proxy Statement, p. 10.) Enron's values are set forth in its 2000 Annual Report to Shareholders:.
• "Communication-We have an obligation to Communicate.
• Respect-We treat others as we would like to be treated ourselves.
• Integrity-We work with customers and prospects openly, honestly and sincerely.
• Excellence-We are satisfied with nothing less than the very best in everything we do.
In every major corporation or company, it is the manager's duty to nurture, protect and enhance the welfare of stakeholders. Ethics guide people in dealings with stakeholders and others, to determine appropriate actions.