As Wall Street remains focused on financial statements as the key indicator of future performance, The Integrity Institute® is focused on the foundation of the organization and the early warning signs to predict how companies withstand market forces.

Using an integrated econometric model and predictive analytics, The Integrity Institute has identified the key measures of structural integrity that predict corporate performance — 1 to 3 years in advance — giving management sufficient opportunity to mitigate risk and strengthen the organization’s performance.

CEOs need to know the decisions they make will have a positive impact on their corporate performance.

Companies are complex and achieving a bird’s-eye view of how decisions are strategically implemented is often difficult. As business segmentation occurs and silos of information are created, management can end up with a myopic view and the ability to compare internal decisions with external results is nearly impossible.

While many organizations use models to make decisions they believe will impact their bottom line, The Integrity Institute’s tools will allow companies to compare the impact of decisions against the entire market to dramatically improve the effectiveness of management decisions.

Imagine if the market had known . . .
there were cracks in Bear Stearns’ foundation 2 years ago.

The key differentiator of The Integrity Institute is the predictability of its measures of structural integrity. Our Integrity Index™ allows us to gauge whether structural weaknesses exist. Our Integrity Assessment™ allows companies to understand where the structural weaknesses exist. Our Integrity Remediation™ allows consultants to correct the weaknesses before they become problems. Our Integrity Intelligence™ allows companies to understand the impact internal decisions have on external results. And our Integrity University™ provides the training necessary for organizations to remain strong.

 In the Dark II (deloitte)

“Lagging” financial indicators alone are insufficient and yet are still the primary source of anticipating future corporate performance.

56% of CFOs today say intentional misstatement of financial statements is still possible. 20% of CFOs feel more pressure to manipulate financial statements than before Enron.

Every day 1,300 people blow the whistle to the SEC to report financial and securities fraud.

“Leading” non-financial indicators are the missing link to measure the structural integrity of the financial indicators and predicting sustainable performance.

75% of Board Directors feel pressure to measure non-financial performance. 67% say they have no clue how to.

Nearly $7 Trillion was lost in the 2 ½ years following Enron, WorldCom, etc. It took another 2 ½ years to rebuild that wealth.

McKinsey predicts financial and credit assets will be $214 Trillion by 2010 (compared to $140 Trillion in 2005).

AN INTEGRATED MODEL TO STANDARDIZE THE MEASURE OF NON-FINANCIAL PERFORMANCE AS AN ASSESSMENT OF CORPORATE INTEGRITY
BY: LYNN BREWER

Redefining Integrity
The corporate scandals that began in the early 2000s with Enron revealed business ethics as a key element of corporate responsibility. Investors were suddenly faced with the realization the underlying integrity of financial statements and their ability to make good investment decisions requires a better understanding of non-financial performance and its impact on financial performance. The burden now is placed upon corporations to find a meaningful way to measure non-financial performance as a means of communicating corporate integrity.

Despite the immense changes in regulation following the corporate scandals, a recent survey of executives and board directors found nearly three-quarters were under increased pressure to assess non-financial performance. Most, however, struggle to find a way to quantifiably measure their non-financial performance.¹ Why? Because no standardized measure of non-financial performance exists that provides for the increased transparency the regulatory changes were expected to provide and investors demand. (more…)

How many business leaders believe they have learned the lessons taught by Enron? That the Enron story is simply one of failed corporate governance – the oversight necessary to maintain the compliance and ethics of an organization? What if I told you that the U.S. Securities and Exchange Commission (SEC) currently receives some 40,000 whistle-blowing reports every month – compared to 6,400 per month the year Enron imploded?

What if I were to tell you that, right now, 100 of the FORTUNE 500 companies could possibly be cooking their books? Would it make you wonder whether business leaders should take a second look at the issue of integrity? (more…)

The USA Today effort to represent Lynn Brewer as fabricating significant portions of her experience at Enron needs to be examined more carefully. One of the key issues is that Ms. Brewer misrepresented herself as an ‘executive’.

Dictionary.com defines an executive as a “person or group having administrative activity in an organization.” Ms Brewer fits that definition based on her job and responsibilities at Enron. Certainly those that she reported to were executives. There is no certification or extant definition for an executive. Ms. Brewer worked inside Enron and had the opportunity to observe decision making at all levels. Most experts on the downfall of Enron agree that a corrupt corporate culture at all levels was at the heart of the fraud and collapse of the organization. To try to discredit Ms. Brewer based on the definition of an executive is wrong. If you want to criticize her impact, it might be more appropriate to reflect upon her message, insights and impact on business ethics in organizations and among universities throughout the country. Having seen her speak many times, she always represents herself as mid-level management. She was not a ‘clerical’ as indicated in the article on Oct. 12 by her former associates.

Most important, her speeches are not based on being a whistleblower. She has taken her experience at Enron and developed expertise on what causes organizational ethical misconduct. Speaking from the perspective of a college professor who conducts research on business ethics, Lynn Brewer has made a significant difference in her speaking and writing.

O.C. Ferrell, Ph.D.
13209 Russian Sage Ct. NE
Albuquerque, NM 87111
Day (970) 219-5612
Evening (505) 823-0904

www.ocferrell.com

On Friday, October 12, 2007, USA Today published a story casting doubt on my character and suggesting I am not who I say I am. I guess I should not be surprised by the allegations in the article as they were made by people who did not fare well in my book, Confessions of an Enron Executive: A Whistleblower’s Story. I don’t find it unusual that I am criticized by the very people who stood by and did nothing about the wrongdoing at Enron, despite growing evidence of that wrongdoing. To those criticisms and to those who put credence in those allegations, I say, “consider the source.”

All of the allegations raised in the article are false, and I have the documentation to prove it – documentation that was provided to the reporter who chose to ignore it.

I guess I also shouldn’t be surprised by the negative tone of the article from a reporter who has published a book that would be considered by many to be one that is competing with mine. Perhaps a reporter with less personal interest in my success or failure might have written a different story.

I also find it interesting that no one in the article refutes anything in my book. What they challenge is whether or not I was an executive of the company. If you look at the dictionary definition of executive – “one who holds a position of administrative or managerial responsibility in a business or other organization” – clearly, I was an executive during my tenure at Enron. I was not an officer or a vice president and have never claimed to be. Probably the clearest evidence of my position in the company comes from two calls from Ken Lay’s secretary requesting that I meet with Mr. Lay, and my subsequent meeting with him shortly before his passing.

I also find it interesting that it has taken six years for these people to come out and attack only me and not what’s in my book. I find it interesting that they have remained silent for this long and suddenly step forward to attack me on whether or not I was an executive at Enron and on very little else. I find it interesting that the comments from four of the two dozen people the author claims to have spoken with, are aimed at me and not at the issues I raised in my book. And if they claim they could no longer remain silent about what they feel is an injustice regarding me, I would challenge them to explain why they remained silent about the injustices at Enron when many of them were knowledgeable of what was going on there. It’s the same lack of integrity and ethical behavior evidenced by their comments, their timing and the article itself.

I stand by everything I have written, everything I have said, and everything that I am. I will continue to speak out, to work for a higher level of integrity and ethical behavior at all levels of business, and I will not be silent with those who cast aspersions on my character.

Lynn Brewer

Historically, corporate performance analysis has focused on a company’s financial performance - commonly known as “lagging” indicators. This “rear-view mirror” method of analysis depends on accurate financial statements - yet more than 20% of CFOs say they feel more pressure to practice aggressive accounting than they did before Enron. (more…)

In reality, the lives of most whistleblowers are far from glamorous. In “Whistleblowers: Broken Lives and Organisational Power”, Fred Alford, a professor at the University of Maryland, writes, “the average whistleblower of my experience is a 55-year-old nuclear engineer working behind the counter at Radio Shack. Divorced and in debt to his lawyers, he lives in a two-room rented apartment.” (more…)

Octoberr 21, 2004Speaking on the issue of Sarbanes-Oxley and highlighting the need for tighter compliance legislation, the key whistleblower at the heart of the Enron scandal has warned that ‘cooking the books’ is still very much a part of corporate America.

Addressing the audience at Better Management Live in Las Vegas, Lynn Brewer, author of Enron post-mortem House of Cards, said: “Enron was the poster-child for corporate corruption but it is clear the factors in existence when Enron imploded are still in place today.”

Quoting figures from a recent CFO Magazine survey, Brewer said: “Forty-seven per cent of CFOs today feel pressure to cook the books and 18 per cent of CFOs actually feel more pressure than they did pre-Enron.” (more…)