A Series on Work Ethics Examines Enron

January 13, 2017

Playing By the Rules: Ethics at Work, a new three-part WNET documentary series, explores the vital role of ethical decision making in contemporary business practices. In episode two, Ask Why, the series interviews Sherron Watkins and key players close to the events at Enron to examine the rise and fall of the company at the center of one of the most notorious corporate scandals of the twentieth century — and the ethical drift that contributed to the company’s downfall.

Enron employees leave the headquarters building in Houston, TX, late February 7, 2002. REUTERS/Richard Carson RJC.

Enron employees leave the headquarters building in Houston, TX, late February 7, 2002. REUTERS – Richard Carson RJC.

Ask Why takes a look at the energy company from Houston, which, in just 15 years, had built itself into the seventh largest corporation in America by 2001 — and examines the events that led to the company’s collapse, including the corporate environment that inhibited the board of directors from exercising governance and control. Enron’s employees lost tens of billions of dollars in retirement savings as the company’s stock rapidly lost value. The scandal also ruined Enron’s accounting firm, and 85,000 Arthur Andersen employees lost their jobs when the firm collapsed and closed.

How did this all happen? Answers are found in the film’s candid interview with Sherron Watkins, then a vice president in corporate development, who sounded the alarm bell at the time, writing a letter to Enron founder and chairman Ken Lay on the serious nature of the accounting fraud hiding the company’s investment losses: “Has Enron become risky place to work?” she asked. “I am incredibly nervous we will implode in a wave of accounting scandals.” Her pleas to the captain to right the corporate ship fell on deaf ears, and some five months later Enron declared bankruptcy.

Viewers will also hear from several other experts and key players relevant to the case—including Sean Berkowitz, who ran the Justice Department’s Enron Task Force in 2005 and 2006; Philip Hilder, former Justice Department official and Watkins’ attorney; energy analyst John Olson, who felt Enron’s wrath after downgrading the energy giant’s rating; Mimi Swartz, executive editor of Texas Monthly magazine and author (with Watkins) of Power Failure: The Inside Story of the Collapse of Enron; Henry McGee, a senior lecturer at Harvard Business School. Now, he teaches the Enron case there as part of a leadership and corporate accountability course to help prevent future executives from sliding down the same slippery slope.

To this day, the Enron collapse remains a case study in how quickly bad business ethics can bring down a company. Why did Enron’s collapse take the financial community by complete surprise? Were there any warning signs that Enron was not as financially stable as it appeared?

Comprised of three 30-minute films, the series Playing By the Rules: Ethics at Work focuses on real cases of fraud, whistleblowing and corruption in corporate America and implicitly asks viewers, “What would you do?” Each penetrating documentary draws on business school case studies, original reporting, social psychology and commentary from prominent ethicists in three eye-opening examinations that cover a range of relevant issues involving the energy market, financial institutions, the mortgage crisis, pharmaceuticals, and more. The first episode, The Whistleblower, can be seen online now. The series is hosted by New Yorker staff writer and former hedge fund analyst Sheelah Kolhatkar. Her book Black Edge: Inside Information, Dirty Money and the Quest to Bring Down the Most Wanted Man on Wall Street will be published in February by Random House.

The series as a whole looks at how ethics play a major role in contemporary business practices and challenges viewers to think about what they would do in these situations. From debating whether or not to act on a piece of insider information, choosing between the wellbeing of employees or an obligation to shareholders, or disclosing information about products with potentially harmful effects to consumers — understanding ethical decision making is a critical skill in the modern workplace. Good people usually do the right thing. But as social psychology experiments have shown, even the most moral character can be influenced under certain circumstances. In every business ethics case there are “gray areas” where decision-making can be challenging and complex.

“WNET is uniquely placed to explore challenging topics like business ethics in depth,” says WNET President and CEO Neal Shapiro. “Where other news outlets might dedicate a few minutes to a topic like this, we are able to dig deeper on behalf of our viewers to tell a more nuanced and detailed story.”

The third story in the Playing By the Rules: Ethics at Work series will focus on a pharmaceutical company case.

Playing By the Rules: Ethics at Work — Ask Why premieres on Wednesday, January 18 at 8 p.m. on WLIW21; Thursday, January 19 at 8:30 p.m. on THIRTEEN; and on Tuesday, January 24 at 10:30 p.m. on NJTV.

The film can be viewed online on all three station sites beginning January 18 at 8 p.m. at wliw.org/ethics and njtvonline.org/ethics and thirteen.org/ethics. Additional options for viewing Playing By the Rules: Ethics at Work can be found at Thirteen.org/anywhere, WLIW.org/anywhere and NJTVonline.org/anywhere.