Although much has already been written about the rise and fall of
Enron, four important questions remain unanswered: What management
behavior and practices led Enron down the path from truly
innovative to fraudulent management? How could Enron's board of
directors have failed to detect the business, ethical, and legal
risks embedded in the company's aggressive financial strategies and
accounting practices? Why did Enron's external watchdogs--security
analysts, credit-rating agencies, and regulatory agencies--fail to
bark? What actions can prevent Enron-type breakdowns in the future?
"Innovation Corrupted" addresses each of these questions.
In contrast to the time-line narratives of previous books on
Enron that offer interesting but largely unsystematic insight into
individual actions and organizational processes, "Innovation
Corrupted" pursues a more methodical analysis of the causes and
lessons of Enron's collapse. Based upon newly available sources,
Salter identifies the social pathologies and administrative
failures that fostered the company's ethical drift and inhibited
the board of directors from exercising effective governance and
control. Salter also goes beyond the work of previous books by
proposing practical recommendations for preventing future
Enron-type disasters. These prescriptions relate to board
oversight, financial incentives for executives, and, most
importantly, the maintenance of ethical discipline when operating
in the murky borderlands of the law. It was in this shadowed space
that Enron's senior executives lost their way.
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