The avalanche of startling revelations regarding Enron’s aggressive business, accounting,
and fi nancial reporting decisions reported by the business press during the
early weeks of 2002 created a fi restorm of anger and criticism directed at Enron’s key
executives, principally Kenneth Lay, Jeffrey Skilling, and Andrew Fastow. A common
theme of the allegations leveled at the three executives was that they had created a
corporate culture that fostered, if not encouraged, “rule breaking.” Fortune magazine
observed that, “[i]f nothing else, Lay allowed a culture of rule breaking to fl ourish,”18
while Sherron Watkins testifi ed that Enron’s corporate culture was “arrogant” and
“intimidating” and discouraged employees from reporting and investigating ethical
lapses and questionable business dealings.19 Finally, a top executive of Dynegy, a
company that briefl y considered merging with Enron during late 2001, reported that
“the lack of internal controls [within Enron] was mindboggling.”
The avalanche of startling revelations regarding Enron’s aggressive business, accounting,and fi nancial reporting decisions reported by the business press during theearly weeks of 2002 created a fi restorm of anger and criticism directed at Enron’s keyexecutives, principally Kenneth Lay, Jeffrey Skilling, and Andrew Fastow. A commontheme of the allegations leveled at the three executives was that they had created acorporate culture that fostered, if not encouraged, “rule breaking.” Fortune magazineobserved that, “[i]f nothing else, Lay allowed a culture of rule breaking to fl ourish,”18while Sherron Watkins testifi ed that Enron’s corporate culture was “arrogant” and“intimidating” and discouraged employees from reporting and investigating ethicallapses and questionable business dealings.19 Finally, a top executive of Dynegy, acompany that briefl y considered merging with Enron during late 2001, reported that“the lack of internal controls [within Enron] was mindboggling.”
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