Ten Years Later, Lessons Learned from the Enron Scandal
USA Today recently wrote that when Enron filed for bankruptcy in December 2001, it “cemented its reputation as the very symbol of corporate fraud.” The Wall Street Journalopines, “Ten years on, the Enron Corp. scandal looks like a cakewalk.” The facts are that the collapse of Enron, once the nation’s seventh-largest company, wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.
The Business Roundtable Institute for Corporate Ethics, housed at the University of Virginia Darden School of Business, asked a team of leading business ethics scholars to reflect on the meaning of the Enron scandal, to compare and contrast Enron with the global economic crisis and to offer their thoughts on the current state of public trust in business.
For example, Darden Professor Ed Freeman responded to the questions: What is the most important lesson learned from Enron and why do you think Enron continues to be part of conversations about the relationship of business and society?
“Enron remains an iconic scandal. It defines what is wrong with our current narrative about business. When business focuses only on shareholder value, executive compensation and narrow views of self-interest, value creation just cannot be sustained. Every viable business creates value for customers, employees, suppliers, communities, as well as investors. Enron is a symbol for companies that have not paid attention to this fact, and still stands as a warning.”
Read additional quotes from business ethics experts here.
The Business Roundtable Institute for Corporate Ethics is an independent entity established in partnership with Business Roundtable — an association of chief executive officers of leading U.S. companies with nearly $6 trillion in annual revenues and more than 13 million employees — to renew and enhance the link between ethical behavior and business practice.
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D., MSBA and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
Director of Media Relations
Darden School of Business
University of Virginia