Enron’s Lessons - SASCOM

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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?

Redefining integrity
We have been misguided into believing integrity equates to ethics and that if you have solid corporate governance policies, the integrity of the organization is sound. Although certainly compliance, ethics and corporate governance are part of an organization’s integrity, we must expand our approach. If, for instance, we were to approach organizational integrity the way a structural engineer examines a building, we would realize the issue has far less to do with policies and procedures and more to do with overall soundness of the business and its ability to withstand market forces.

Integrity, originating from the word “integer” (a whole number), in its simplest form means “soundness, wholeness and incorruptibility.” When we realize hundreds of companies have demonstrated that they operate with the same level of integrity as Enron, we begin to understand stakeholders’ needs to have a way of separating the wheat from the chaff – the Enrons from the others. And equally important, companies need to have a way of differentiating themselves as something other than the next Enron.

As they achieve this, companies gain shareholder confidence while shareholders gain the financial benefit of a greater ROI.

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The Importance of Structural Integrity - Bear Sterns

Like buildings—companies need structural integrity. As we have seen, even the tallest buildings and biggest companies can fall virtually without warning.
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 […]