Thursday, February 21, 2002

It's The Principle

"When a man says he approves of something in principle, it
means he hasn't the slightest intention of putting it into
practice. "
Otto von Bismarck

Most people have a set of principles that govern their day-to-day actions. For the vast majority of us, it's pretty basic, ten commandments type of stuff: don't lie, don't cheat, don't steal, don't throw rocks through the window of the kid next door who plays his guitar with the amp turned to 11 in the middle of the night.... even though no one would blame you.

While the particulars might vary, the drivers of these guiding lights are generally the anchors of an individual's world... his or her family, religion and friends. Do your parents return the extra change that the cashier mistakenly gives you? You might too. Does your church group donate time to kids in trouble? It might fit into your schedule as well. By the same token, if you hang with a gang who shoplifts for fun, there's a good chance that there's a bail bondsman in your future.

But while the development of your core values might be organic, for a manufactured entity they must be invented. They must take into account the tenor of the organization, its mission and purpose, as well as the environment in which it operates. And nowhere is that more apparent than in the modern corporation.

Companies of old had one but one focus: to make money. But in today's equal opportunity, ecologically sensitive, gender neutral, racially blind, politically correct world, that's not enough. The interest of the different stakeholders has to be addressed, from employees to shareholders to customers to community. It's a tough balancing act to accomplish, but woe to the company that devotes itself to merely trying to turn a profit.

In most cases, these high minded creeds are plastered on walls and entombed in Lucite tchotchkes to adorn hallways and desks. And in the main, they are basically adhered to. Yes, we are good corporate citizens. Yes, we have respect for our customers, employees and communities. Yes, we strive to be the best that we can be. Yes, yes, yes. But occasionally, like all mortal beings, companies have been known to fall from the paths of the angels. And nowhere has that happened more spectacularly than at Enron. In fact, when you look at the big picture, there's not a single aspect of its underlying moral codes that it failed to obliterate.

For instance, just take a look at that company's published core values. "RESPECT: We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don't belong here. COMMUNICATION: We have an obligation to communicate. Here, we take the time to talk with one another ... and to listen. We believe that information is meant to move and that information moves people. INTEGRITY: We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won't do it. EXCELLENCE: We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be."

Talk about batting a thousand. There's not a single aspect of the creed that hasn't been disregarded. "Ruthlessness, callousness and arrogance" not only did belong there, there were in fact guiding principles. "We believe that information is meant to move..." Sure, as long as we move out of the stock first. "We work with customers and prospects openly, honestly and sincerely." C'mon. And "Excellence?" Well, there you might have something. They raised the bar on deceit to unheard of levels.

OK, you can argue, the top management of the company played fast and loose with their own rules. But surely it didn't extend to outside oversight, did it? Well, we know the firm's accountants, Arthur Andersen, was busy shredding evidence, certainly not a shining tenet of its profession. And it was recently reported that the full board of directors of the company twice suspended the company's ethics code during 1999 in order to allow two outside partnerships to be headed by a top Enron executive who stood to financially benefit from them. You can only hope that your own 17-year-old isn't half this incorrigible.

The good news is that if you go to Ebay, you can purchase a piece of this testament, the way someone might want a piece of the Triangle Shirt Waist factory. On that web site, you can find the Enron "Visions and Values" paperweight, featuring the corporation's core values for just $76. Or even more germane is the company's Code of Ethics handbook and its Risk Management manual. Not surprisingly, both items are listed as being in "mint condition," like they were never read... which, in fact, they probably weren't. At last check, the most recent bid was over $300, though it might just be a bidding war between Justice and the SEC to see who gets the evidence.

Not to create too much revisionist history, but one wonders if, given what we know now, Ken Lay and friends would have adopted one more core value. Best espoused by Groucho Marx, it goes as follows: "Those are my principles, and if you don't like them... well, I have others."


Marc Wollin of Bedford hopes this is his only obligatory Enron column. He's afraid it's not. His other attempts will be found regularly in The Record-Review and The Scarsdale Inquirer.