The Enron Code of Ethics: Something Every Boss Should Read

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I dug this old thing out for a paper I am working on. Enron is an ancient story, but as we see the wave of scandals rolling through, I think it is important to once again remember how much hypocrisy and pure dishonesty spews out of organizations at times. Part of the story is the weird phenomenon that we talk about in The Knowing-Doing Gap, that talk is sometimes treated as a substitute for action, that by saying the right thing it somehow excuses people from actually doing it. Attached is a 60+ page pdf from The Smoking Gun of Enron's Code of Ethics, dated July, 2000. It starts with a foreword from the late Kenneth Lay, who was back to being CEO by then, which opens with this sentence:

"As officers and employees of the Enron Corp., its subsidiaries, and its affiliated companies, we are responsible for conducting the business affairs of the companies in accordance with all applicable laws and in a moral and honest manner."

In reading this, I start to wonder, what does the code of ethics in Bernie Madoff's company look like? Also, this is a very detailed document, as I said over 60 pages. My hypothesis is that the longer a code of ethics in a company, the more likely they are too be sleazeballs. As I've heard my father-in-law say many times, when people talk about ethics and morals more than seems necessary, his impulse is hide the good silverware.

Here is the Download for Enron ethics

Comments

12 responses to “The Enron Code of Ethics: Something Every Boss Should Read”

March 5, 2009

Rod Johnson

I don’t know if anyone remembers a story from the 90s about Continental Airlines, which at the time was run by accountants and bankers. During their tenure, customer service agents were guided be a book that was 9″ thick, a place where every rule and exception could be found. It was referred to as the “Thou Shalt Not Book.” As you can imagine, it was easier to say no to any question or request that the department fielded, than to work to make a customer happy. The book became the conduit to terrible customer service. When new management came in, they held a book burning of sorts. So yes, its pretty easy to hide to behind the complexity code.

Reply
March 5, 2009

Rod Johnson

I don’t know if anyone remembers a story from the 90s about Continental Airlines, which at the time was run by accountants and bankers. During their tenure, customer service agents were guided be a book that was 9″ thick, a place where every rule and exception could be found. It was referred to as the “Thou Shalt Not Book.” As you can imagine, it was easier to say no to any question or request that the department fielded, than to work to make a customer happy. The book became the conduit to terrible customer service. When new management came in, they held a book burning of sorts. So yes, its pretty easy to hide to behind the complexity code.

Reply
March 5, 2009

Michael Sporer

I saw a code of ethics for GE in the Welch era. It was short and simple, and integrity was ingrained as a culture. No number of words can replace culture. Same goes for mission statements.

Reply
March 5, 2009

Michael Sporer

I saw a code of ethics for GE in the Welch era. It was short and simple, and integrity was ingrained as a culture. No number of words can replace culture. Same goes for mission statements.

Reply
March 5, 2009

Dan

Bob, Enron’s example is so famous, and yet most of us struggle with the magnitude of the discrepancy between the “statement” part and the actual appalling behavior. I have my own theories about it, of course, but how — by what human mechanism — do you think this actually happens? How could such a HUGE elephant in the room persist? It is practically at the level of the Nazi doctors who so numbed out reality they lived in pretense and totally lost their own humanity.
It is so easy to condemn what happened at Enron, but do we really understand it well enough to know we are better, we are immune?

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March 5, 2009

Dan

Bob, Enron’s example is so famous, and yet most of us struggle with the magnitude of the discrepancy between the “statement” part and the actual appalling behavior. I have my own theories about it, of course, but how — by what human mechanism — do you think this actually happens? How could such a HUGE elephant in the room persist? It is practically at the level of the Nazi doctors who so numbed out reality they lived in pretense and totally lost their own humanity.
It is so easy to condemn what happened at Enron, but do we really understand it well enough to know we are better, we are immune?

Reply
March 6, 2009

Hayli @ RiseSmart

Enlightening post! This is kind of like a saying I heard once along the lines of, “He who prays longest in public prays least in private” or something like that. It’s interesting because there was a Fistful of Talent debate this week over whether HR should become the “ethics police” or whether ethics should be an organizational effort from the top down. But your post reminds us that even with an ethics committee and a CEO seemingly dedicated to ethical behavior, it doesn’t necessarily mean much.

Reply
March 6, 2009

Hayli @ RiseSmart

Enlightening post! This is kind of like a saying I heard once along the lines of, “He who prays longest in public prays least in private” or something like that. It’s interesting because there was a Fistful of Talent debate this week over whether HR should become the “ethics police” or whether ethics should be an organizational effort from the top down. But your post reminds us that even with an ethics committee and a CEO seemingly dedicated to ethical behavior, it doesn’t necessarily mean much.

Reply
March 6, 2009

Gregor Rohda

I have been surprised that there hasn’t been more analysis and inclusion of the Enron era failures in the discussions about our current meltdown. It seems that the failure of SARBOX to bring truth to financial reporting is relevant – surprising that someone hasn’t used to as a sharp finger to point at congress for their role in this mess.
Also, I re-read The Conference Board’s analysis of the Ethics Breakdown, and thought I’d share the link where I found it.
http://infoedge.com/product_type.asp?product=cb-ea15

Reply
March 6, 2009

Gregor Rohda

I have been surprised that there hasn’t been more analysis and inclusion of the Enron era failures in the discussions about our current meltdown. It seems that the failure of SARBOX to bring truth to financial reporting is relevant – surprising that someone hasn’t used to as a sharp finger to point at congress for their role in this mess.
Also, I re-read The Conference Board’s analysis of the Ethics Breakdown, and thought I’d share the link where I found it.
http://infoedge.com/product_type.asp?product=cb-ea15

Reply
March 6, 2009

Wally Bock

Having an ethics policy is not ethics.
A couple of years ago, I reviewed the best book I’ve ever come across on business ethics. It’s Profit with Honor by Daniel Yankelovich. Here’s a link to the review.
http://blog.threestarleadership.com/2007/08/09/book-review-profit-with-honor-by-daniel-yankelovich.aspx
On another note, I remember that the Southwestern Legal Foundation who had a Center for Law Enforcement Ethics and some excellent programs in that area, used to sell coffee mugs with the legend: “I’m so ethical, I even paid for this coffee.”

Reply
March 6, 2009

Wally Bock

Having an ethics policy is not ethics.
A couple of years ago, I reviewed the best book I’ve ever come across on business ethics. It’s Profit with Honor by Daniel Yankelovich. Here’s a link to the review.
http://blog.threestarleadership.com/2007/08/09/book-review-profit-with-honor-by-daniel-yankelovich.aspx
On another note, I remember that the Southwestern Legal Foundation who had a Center for Law Enforcement Ethics and some excellent programs in that area, used to sell coffee mugs with the legend: “I’m so ethical, I even paid for this coffee.”

Reply