Legal Status of American Unions
Introduction
Virtues play a large part in garnering the trust of corporation’s shareholders, their employees and customers. Stockholders put their trust, and hard earned money in the hands of companies with the thinking that the owners of the company will honest and truthful. In the 1990’s Enron was a worldwide corporation of nearly 25,000 employees, and had revenues of over 100 billion dollars (Behr & Witt, 2002). Despite all of Enron’s fame and glory, the company crumbled as a result of bad management and unethical practices. According to Donaldson & Werhane (2008), “The controls as designed were not rigorous enough and their implication and oversight was inadequate at both Management and Board levels,” (p. 313).
The objective of this paper is to discuss virtues in regard to the fall of the Enron Empire. This discussion will investigate how implementing virtues into the Enron’s structure would have possibly made a difference in the outcome of the company. Swanton said, “A virtue is a disposition to respond in a good or appropriate way to a situation or event (Swanton, 2005). By following this single sentence, Enron could still be operating. Greed is a very powerful virtue.
Greed
Greed: a selfish and excessive desire for more of something (as money) than is needed (Merriam-Webster, n.d.)
Greed comes in many forms, none more than that demonstrated by executives of Enron. Enron CEO’s Kenneth Lay and Jeffrey Skilling created a number of special purpose entities from which they profited extraordinarily through excessive compensation. Through Enron’s compensation plans the company was able to pay one executive enough stock options to leave the company in 2000 with $265 million in cash. In 2000, Ken Lay’s compensation exceeded $140 million. In early 2001, Enron paid $750 million in bonuses for 2000 (Donaldson & Werhane, 2008).
The Board and the Compensation Committee essentially failed and, in some cases, knowingly approved lavish compensation practices. In another example the Board approved company loans to Ken Lay, which he was allowed to repay with company stocks. Enron’s compensation levels were paid not according to the company’s interest, but to keep ahead of the competition’s salaries.
The Greek philosopher Epicurus said, “Wealth consists not in having great possessions, but in having few wants.” Enron let its wants drive their ethical decisions. Enron’s gains were centered on greed. The short term results led to lavish life styles for the executives of the company, and great compensation for its employees. By operating for profits instead of on principles, Enron eventually paid the price by going bankrupt, and ruining the lives of numerous investors.
Honesty
Honesty