Lessons from Enron: a Symposium on Corporate Governance, October 17, 2002, Luncheon Keynote Speech - Kenneth E. Lawson

• Citation: Vol. 54 No. 2
• Publication year: 2003

Lessons from Enron: A Symposium on Corporate Governance October 17, 2002

Luncheon Keynote Speechby Kenneth E. Lawson*

It is a pleasure to be here with you today. In the wake of international terrorism, the United States faces the consequences of yet another crisis: that of deception and fraud on the part of American business leaders and advisors. As has become more obvious, white-collar corporate fraud is not a victimless crime. Employees ofcorporations and their families, investors, and those who believe in the American dream are devastated by this conduct. Often silent but destructive, corporate fraud can go undetected for years and ordinarily will not come to light until immense and irreversible damage has been done.

The topic at hand concerns us all and has brought to light the role of those boards of directors responsible for the oversight of our American corporations, the responsibility of individual shareholders, and overall government regulation of business activity. I would like to think that Enron, WorldCom, and the like are the exceptions rather than the proverbial "rule."

The actions of these criminals, of course, impact more than just our domestic markets; the impact on our global economy cannot be forgotten. We are an interdependent economy—investors and joint ventures play an integral part in our economy's well-being. When United States citizens lose confidence in those we allow to manage our businesses and trust is eroded, when credibility ceases, how can we expect our foreign trading partners to risk involvement?

President Bush stated on July 9, 2002 to an audience of Wall Street businessmen and women in New York City:

The American economy—our economy—is built on confidence. The conviction that our free enterprise system will continue to be the most powerful and most promising in the world. That confidence is well-placed. After all, American technology is the most advanced in the world. Our universities attract the talent of the world. Our workers and ranchers and farmers can compete with anyone in the world. Our society rewards hard work and honest ambition, bringing people to our shores from all around the world who share those values.¹

When our businesses fall prey to the same greed that some might argue is human nature and therefore endemic of society as a whole, we must look at causes and remedies. Is the infrastructure too lenient; are regulations in need of revisitation? What can we do to ensure that similar corporate maladies do...