Innovation Corrupted

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 Enrons board of directors have failed to detect the business, ethical, and legal risks embedded in the companys aggressive financial strategies and accounting practices? Why did Enrons external watchdogssecurity analysts, credit-rating agencies, and regulatory agenciesfail 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 Enrons collapse. Based upon newly available sources, Salter identifies the social pathologies and administrative failures that fostered the companys 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 Enrons senior executives lost their way.