The Enron scandal is a painful example of what can go wrong
in American business. Fundamentally, the American style of
capitalism depends on trust. It needs to be able to depend on
promises made, on reports being truthful, on facts being facts. To
be sure, occasional relatively small mistakes, short delays, or
little lies occur and can be worked around, but a big breach of
trust can wreak havoc.
 Sensible principles have evolved to protect against such
havoc, but Enron did not abide by these sensible principles. Here
are four examples of such principles and how Enron betrayed
 1. Good corporations establish a structure
of reasonable rules to guide their executive decision-making and
their employee behavior.
 But the executives who created the Enron scandal shredded
its trust and the ethical structure that had supported it.
 2. A good corporation reports accurately
and adequately to its shareholders, its regulators, its suppliers,
and its communities.
 But Enron reports to the outside world were far from
adequate. The most egregious omission was their neglecting to
report the huge debts building up in the many "partnerships" that
were being created.
 3. A good corporation keeps its employees
informed of developments that would affects its customers, the
marketability of its products and services, and the employees' own
 But Enron repeatedly hid information about risky ventures,
developments adverse to its stock price, or other events that
worked to affect the employees' pensions.
 4. A good corporation develops and
implements a practical code of ethics, including fair play in
dealing with customers, fair treatment and training of employees,
and respect for human rights and dignity.
 But whatever Enron's statements show, when Enron's bubble
burst, most of its key executives seem to have taken care of
themselves and not their partners, their customers, or their
 At root, there is an ethical backbone in American
capitalism. Enron broke its own ethical back.
 Let's hope that many other corporations learn from Enron's