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Ethics, integrity and Enron
April 20, 2007
Enron whistleblower Lynn Brewer spoke to nearly 200 PLU students last week about succeeding in business while also leading an ethical life.
Brewer was an executive at Enron from 1998 to 2001, and quit shortly before the company imploded. Since the debacle, she’s founded The Integrity Institute, a for-profit research company based in Seattle that measures and predicts the integrity of other companies.
It was through her new venture that Brewer met PLU School of Business Dean Andy Turner, who invited her to speak at PLU.
“It just occurred to me she might be a really interesting speaker, in part because of PLU’s connection to leading an ethical life,” Turner said. “I though she would be interesting and offer the kind of message that students, not just business students, need to hear: you can lead in business and lead an ethical life.”
During her hour-long presentation, Brewer detailed the numerous instances of illegal and corrupt dealings she witnessed, including bank fraud, espionage, power price manipulation and the gross overstatements to the press, public and financial world. She explained how Enron did what it did and also talked about how she was sucked into the culture of greed and deceit.
“Sleaze never gets easier but it always gets more enjoyable for companies,” Brewer said. “The longer you’re in the sleaze … the harder it is to see right from wrong.”
Among the many statistics Brewer posted, the most startling was that 2 to 6 percent of the population in any given company are involved in something illegal or unethical. The culture of the company will ultimately determine if those actions are tolerated or dealt with, she said.
“The question as to whether or not it’s more widespread has everything to do with culture,” Turner said. “In my experience, that culture is determined by the top guys.”
Brewer’s new organization measures the integrity of a company by studying the company’s culture. She compares her work to that of engineer assessing the structure of a building: she looks at the company’s culture to see if it can withstand the market structure.
To illustrate how easy it can be to get sucked in to unethical behavior, Brewer compared her involvement in the corrupt dealings to everyday, college-related scenarios.
For example, within six months of beginning her job at Enron, she found what appeared to be nearly $250 million in bank fraud. When she brought it to the attention of her supervisor, she was told to look the other way. As a mid-level executive who was new to the company, Brewer wasn’t prepared to defy her supervisor, just like a freshman student isn’t prepared to challenge a tenured professor, she said.
Mid-level executives are at the biggest risk to have their integrity compromised because they carry out the orders of the higher-ranking executives, Brewer said. She encouraged students to stand up for what they believe to be right and ethical, regardless of the consequences.
“Frankly, you may not know if it’s legal or not,” she said. “The only thing you can do is go with your gut. Your gut is probably right.”
Most people believe that what happened at Enron can’t happen to them in their professional lives, but Brewer contends that unethical things will likely go on where PLU students work in the future. The situations aren’t black and white, and the problems arise when companies try to cover up deals that didn’t go their way, she said.
“My hope for each and every one of you is you don’t have to see what it’s like,” Brewer said. “Life is very precious and the one thing you have is your soul. It’s not worth it.”
Photo by Chris Hunt.
It was through her new venture that Brewer met PLU School of Business Dean Andy Turner, who invited her to speak at PLU.
“It just occurred to me she might be a really interesting speaker, in part because of PLU’s connection to leading an ethical life,” Turner said. “I though she would be interesting and offer the kind of message that students, not just business students, need to hear: you can lead in business and lead an ethical life.”
During her hour-long presentation, Brewer detailed the numerous instances of illegal and corrupt dealings she witnessed, including bank fraud, espionage, power price manipulation and the gross overstatements to the press, public and financial world. She explained how Enron did what it did and also talked about how she was sucked into the culture of greed and deceit.
“Sleaze never gets easier but it always gets more enjoyable for companies,” Brewer said. “The longer you’re in the sleaze … the harder it is to see right from wrong.”
Among the many statistics Brewer posted, the most startling was that 2 to 6 percent of the population in any given company are involved in something illegal or unethical. The culture of the company will ultimately determine if those actions are tolerated or dealt with, she said.
“The question as to whether or not it’s more widespread has everything to do with culture,” Turner said. “In my experience, that culture is determined by the top guys.”
Brewer’s new organization measures the integrity of a company by studying the company’s culture. She compares her work to that of engineer assessing the structure of a building: she looks at the company’s culture to see if it can withstand the market structure.
To illustrate how easy it can be to get sucked in to unethical behavior, Brewer compared her involvement in the corrupt dealings to everyday, college-related scenarios.
For example, within six months of beginning her job at Enron, she found what appeared to be nearly $250 million in bank fraud. When she brought it to the attention of her supervisor, she was told to look the other way. As a mid-level executive who was new to the company, Brewer wasn’t prepared to defy her supervisor, just like a freshman student isn’t prepared to challenge a tenured professor, she said.
Mid-level executives are at the biggest risk to have their integrity compromised because they carry out the orders of the higher-ranking executives, Brewer said. She encouraged students to stand up for what they believe to be right and ethical, regardless of the consequences.
“Frankly, you may not know if it’s legal or not,” she said. “The only thing you can do is go with your gut. Your gut is probably right.”
Most people believe that what happened at Enron can’t happen to them in their professional lives, but Brewer contends that unethical things will likely go on where PLU students work in the future. The situations aren’t black and white, and the problems arise when companies try to cover up deals that didn’t go their way, she said.
“My hope for each and every one of you is you don’t have to see what it’s like,” Brewer said. “Life is very precious and the one thing you have is your soul. It’s not worth it.”
Photo by Chris Hunt.