Ethics, Enron and Arthur Andersen

Meanwhile, Enron was a year away from collapse. The gleaming stadium became a metaphor for enormous expense casually undertaken, rationalized with anticipated income increasingly based on desperate wishful thinking.

In hindsight, Enron's death was symptomatic of growing global problems. In an age of great prosperity and exceptionally cheap credit, people fairly easily could put greed before good judgment.

Kullberg and Peterson were insightful in describing such developments in some parts of Arthur Andersen.

The end of Enron and the wider Dot Com bubble brought pause but not basic change. The Sarbanes-Oxley Act, rushed through as Enron collapsed, emphasizes rules and documentation, and is criticized as too politically motivated. Speculators meanwhile moved on.

The much greater recent collapse of global derivatives markets may lead to fundamental financial reforms. The steady rise in influence of Paul Volcker in the Obama administration is promising.

Good management, however, requires flexible, insightful human strengths. Regulation and law enforcement only provide context.

Arthur I. Cyr is the Clausen Distinguished Professor at Carthage College and author of 'After the Cold War' (NYU Press and Palgrave/Macmillan). He can be reached at acyr@carthage.edu

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