BI for FEBRUARY...

ENRON PLUS 10 - “SOMEWHERE, THE GHOST OF KEN LAY IS SMILING”

A powerful CEO wows his board with incredibly complex transactions that make big money for the company -- right up until the whole scheme collapses.  That is a brief summary of the Enron scandal, which took the business world by storm 10 years ago this month. 

However, as publisher Ralph Ward writes in the February issue of online governance monthly Boardroom INSIDER, the same scenario describes the fall of Jon Corzine’s MF Global fund just a few months ago, “despite a decade of massive corporate governance reform law.”  Landmark legislation such as Sarbanes-Oxley and Dodd-Frank have brought new transparency to corporate finance and governance -- as well as costly compliance burdens. 

Yet despite this wholesale reinvention of disclosure, financial controls, and board oversight, ten years after Enron, “boards still remain buffaloed by complexity, and too intimidated to ask CEOs tough questions,” says Ward.  “Somewhere, the ghost of [Enron’s] Ken Lay is smiling.”

 Also in the February Boardroom INSIDER:

Are new director “signing bonuses” the next board pay trend?
What do CEOs really think of their boards?
Q&A: Best practices for joint venture boards?