Enron and the Whistleblower

The collapse of Enron was the result of unethical management practices on a scale not seen since the failure of many of the savings and loan banks during the 1980s. The scandals should have demonstrated the need for a closer look at the business culture in America. Shareholders and regulatory agencies should have demanded an infusion of ethics, integrity and responsibility.

Sherron Watkins was a person that was applauded for her integrity and ethical behavior because of the memo that she sent.  Whistleblowing involves the disclosure of unethical or illegal activities to someone who is in a position to take action to prevent or punish the wrongdoing. (Hartman, DesJardins, and MacDonald) I do not think that Watkins was a whistleblower her memo was o written after the scandal began to unfold.  Watkins was a Certified Public Accountant, and a member of a professional organization.  She was bound by her professional code of ethics to report unethical behavior, therefore she owed loyalty to the public, her profession and herself. (AICPA Code of Professional Conduct )

If Sharron Watkins wanted to be a whistle-blower, she would have written the memo to the local news outlets.  Watkins wrote the memo to Ken Lay stating, "We're such a crooked company" and warned him of potential whistle-blowers lurking among them and recommended actions to downplay or minimize the damage (Hartman, DesJardins, and MacDonald, Third Edition).

The affect that the Enron collapse had on me, is that of a grim reminder of the consequences of personal greed. Did the collapse of Enron make a difference? Did it improve ethics or better corporate governance?  Yes, in 2002, the U.S. Congress passed the Sarbanes-Oxley act to address the wave of corporate and accounting scandals. (Hartman, DesJardins, and MacDonald, Third Edition).  But opportunity will always exist.  

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