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Enron: Lack of Conscience - May 28, 2006

Enron--Lack of Conscience

May 28, 2006

Dr. Sylvia Gearing, CBS 11 News

The Enron verdicts of conspiracy and fraud that were handed down this week against CEOs Kenneth Lay and Jeffrey Skilling have prompted millions of Americans to question how such wrongdoing can exist in America's corporations. Here to tell us more is psychologist, Dr. Sylvia Gearing.

Q: Now that the guilt verdicts have been decided, how are we to understand such criminal behavior in business leaders?

Dr. Sylvia: Unfortunately, such behavior is all too common, particularly among many people who are in business to make money. Such immoral and irresponsible acts occur gradually in most instances. The Enron debacle probably began years ago when people in the company began to make choices based on greed. Running a business that yields high profits can compromise the judgment of ambitious people.

Q: These leaders were highly successful men prior to Enron. Why did they compromise their success?

Dr. Sylvia: The strategies, drive and perseverance that made them leaders led to their downfall. They were willing to "skirt" the truth and to slant the facts so that their company would continue to deliver big earnings. They wanted to "win" at all costs and were willing to commit fraud to make a profit. They were arrogant enough to believe they could get away with it.

Q: According to witnesses, both Lay and Skilling maintained their innocence even after the verdict was delivered. Why would they continue to protest their innocence?

Dr. Sylvia: The very essence of their crime predicts their continued conceit and rationalization. Both men misbehaved because of their own denial of their actions. Even if they really had failed to commit a wrongdoing, they still were at the helm of a "ship" that went down. There is always accountability in leadership.

Q: We know that leaders without conscience can be very dangerous to work for. Why is it so important for leaders to have that moral compass?

Dr. Sylvia: Leaders set the tone for the entire business. If they are willing to blur the truth--in any fashion--they implicitly give permission for their employees to do the same. There are a million business decisions leaders make over the years. Adhering to a moral compass driven by integrity, compassion, truthfulness, loyalty and justice assures the employee of fair treatment. Enron is an example of a corporation out of control. It is a stunning example of how one bad decision born of the frenzy to make a profit superceded common sense.

Q: Many of our viewers work for bosses who could potentially force them into wrongdoing, such as fraud. Are there specific characteristics that leaders possess that we should look for?

Dr. Sylvia: There absolutely are specific character and behavior traits. Here are a few:

Lack of Conscience: As one psychologist said," a life without conscience is a failed life." Conscience is that personal decision we make every day when we hold ourselves accountable for our thoughts and deeds. It is the deciding factor in whether a life is well lived or tragic. People who lack conscience make terrible decisions, ruin relationships and businesses, as we see in the example of Enron, and fail to ever empathize with those whom they wrong.

Externalization of Blame: This is a huge warning sign for employees. If your boss or supervisor continually blames other people for their own irresponsible or unethical decisions, know that this individual is willing to rationalize his own irresponsibility.

Winning at Any Cost: This is a frightening characteristic because wrongdoing can be rationalized as a necessary evil. As many people succeed in their careers, they often acquire a thirst for monetary triumph or for personal recognition. As a result, they commit wrongdoing and pretend that it is "collateral damage" in their struggle to succeed.

Views Kindness as a Weakness: Many people with power can begin to judge others based solely on their status in the world. Some of the best people in the world hold no earthly power. If they view simple kindness or other virtues as weak, you may be working for someone who is highly immoral.

Q: Any tips on what one should do if you work for such a boss?

Dr. Sylvia: If you are unable to immediately resign, document everything you are asked to do. I always urge people to create a paper trail of responsibility. Make a copy and keep a record at home or in your safety deposit box. The best advice is to separate from someone who is unethical because their self interest will eventually sabotage your career.