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In the aftermath of a criminal trial and the unexpected death of Enron founder and former CEO Kenneth Lay, the question arises: Was Ken Lay treated fairly? Science fiction writer Lois McMaster Bujold stated, “The dead cannot cry out for justice, it is a duty of the living to do so for them." As members of “the living", a Houston jury and millions of Americans continue to believe that Ken Lay got what he deserved. In fact, many believe dying in a Colorado hospital from coronary disease was an undeserved mercy afforded a man who was facing a life sentence in prison.
Running the 7th largest company in America (or the 777th) is a lot like guiding a crude oil supertanker through pristine Alaskan waters or having the power to launch a preemptive war against a foreign nation. In each scenario, leaders have the extraordinary burden of being responsible for a huge amount of resources, numerous organizational and personal relationships, and most importantly, the lives, livelihood and future of real people. The negative repercussions of mistakes, bad analysis or a poor set of ethics can be indescribably enormous.
One only has to look at the number of lives forever changed as a result of a major corporate failure like Enron. Internal jobs and careers were lost. Employee retirement accounts built up over decades have been destroyed. Major shareholders like the California Public Employees’ Retirement System also got rocked to the core. Nearly every law, accounting and financial firm associated with Enron paid dearly in terms of penalties, fines and a loss of reputation. Thousands of companies doing business in Enron’s “vendor ecosystem" suddenly had hundreds of millions of dollars of invoices and debt stranded in bankruptcy court. Many smaller Houston-based companies were “one-customer companies" and were forced to quickly find other revenue sources or shut down entirely.
No one can possibly gauge the toll on the personal lives of people associated with Enron. How many wrecked marriages are out there? Lost relationships? How many retired employees receiving well-deserved monthly benefits were violently thrown back into the workforce or worse, doomed to poverty or the indignity of a much lower status of living in their golden years? How many suicides occurred as a result of people who could not face the excruciating consequences of someone else’s greed, avarice or horribly bad judgment? Even one is too many.
As Enron’s founding father and CEO, Ken Lay was lavishly compensated to the tune of $22,000,000 annually, plus stock and benefits. If his wide array of responsibilities could be summed up in one statement, it would be this: Maintain the value owed to all stakeholders in the company. Ken Lay not only had a fiduciary responsibility to all of the financial shareholders he had a responsibility to all stakeholders. To that end, he failed miserably.
Did the courts of law and public opinion treat Ken Lay fairly? The law stipulates that Ken Lay “knew or should have known" that massive accounting fraud in the form of “off-the-books" transactions were occurring in order to artificially inflate the stock price. He either knew or should have known that these kinds of activities would endanger the health of the company he worked so hard to build. Ken Lay either knew or should have known that as the elder executive, board member and mentor to everyone at Enron – he possessed the power and force of personality to publicly admit that Wall Street targets would be missed, to demand honesty in reporting and to correct any wayward behavior on the part of other executives and senior managers. He didn’t do his job and he got what he deserved.
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