When I was in grade three I had this odious teacher that hated kids who squealed on other kids, regardless of the issue. It didn't matter if yo.complained about someone stealing an eraser, cheating on a test, taking your lunch money, or socking you in the
mouth...she didn't want to have to deal with it. To her, integrity was found in silence. If you were affronted by a fellow student and happened to mention it to her, she would respond by a) disregarding you, and b) pinning a long donkey's tail fashioned out of construction on your behind with the words "tattle tail" emblazoned on it.(you had to wear it for the remainder of the day). I tried to make it look fashionable
Personally, I'd like to think that the lessons we learned in elementary school help us out later on in life. If so, I'm certainly glad that Sherron S. Watkins wasn't in my class. As you may, or may not know, Sherron S. Watkins was the Vice President of Corporate Development at Enron who told then CEO Ken Lay in a now-famous August 2001 memo that financial fraud could destroy the energy trading firm. She said his response was to launch a "bogus" probe and try to have her fired.
It was less than four months before Enron collapsed into bankruptcy at a cost of thousands of jobs and billions of dollars of stock-market wealth.
Enron's downfall sparked a federal investigation that resulted in the multiple fraud and conspiracy charges for which Lay, 63, and Skilling, 52, are now on trial. The two face decades in prison if convicted.
Did anything positiv.come out of the Enron debacle? I think we can finger two silvery-gray lined clouds. First, it's all about integrity. Ordinary people matter. Determination matters. Honesty matters. Diligence matters. There is a place for Truth. Secondly...the Sarbanes-Oxley Act. The Sarbane Oxley Act of 2002 is considered to be one of the most significant changes to federal securities law. It came in the wake of a series of corporate financial scandals, including those affecting Enron, Arthur Andersen, and WorldCom.
Among the major provisions of the act are: criminal and civil penalties for securities violations, auditor independence / certification of internal audit work by external auditors and increased disclosure regarding executiv.compensation, insider trading and financial statements.
In the world of publicly trade.companies, there is a lot at stake. Not only are th.companies responsible for their staff, clients, partners, and customers, they're also responsible to the every-day, well intentioned, share holder who has chosen, rightly or wrongly, to believe that what th.company says is true...is actually True.
We need to be able to trust the people in charge. Whenever .company does something noteworthy, the CEO is often the first one to step into the limelight and take the credit along with a big fat bonus. (Lay raked in $150 million in income, bonuses and stock packages. He still sleeps soundly every night in one of his several mansions.) But, when things are bleak, some CEO's seem to disappear into a world of meetings.
Integrity, honor and truthfulness aren't just virtues meant for the third grade. They're qualities for life...and what a better place the stock market (and society at large) would be if everyone lived these virtues more often. While the stock market is still full of inherent risks...it may be just a little safer than it use to be. So hats off to Whistle Blowers like Sherron S. Watkins...and leave the donkey tails at home.
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