Enron Convictions Hinder Every Business Leader's Job

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Author George Brymer has a warning for today’s business leaders: The fraud convictions of former Enron executives Kenneth Lay and Jeffrey Skilling are making their jobs harder than ever. How? The Enron trial underscores the number of highly publicized corporate scandals in recent years, and these disgraces have affected employees at all institutions.

Author George Brymer has a warning for today’s business leaders: The fraud convictions of former Enron executives Kenneth Lay and Jeffrey Skilling are making their jobs harder than ever. How? The Enron trial underscores the number of highly publicized corporate scandals in recent years, and these disgraces have affected employees at all institutions.

In 2004, a human resources consulting firm found that only half of all U.S. workers, just 51 percent, trust their organization’s senior leaders. As Brymer points out, diminishing trust and loyalty levels may in part reflect backlash from the publicity surrounding misconduct at companies like Enron. In his new book, Vital Integrities: How Values-Based Leaders Acquire and Preserve Their Credibility, Brymer discusses the effect:

“We create stereotypes when we base opinions about an entire group on the behavior of a few members, and we seem to be doing that now with business leaders. Newspapers report daily on investigations into corruption involving companies like Enron, Arthur Anderson, Global Crossing, WorldCom, and Tyco. Business leaders face accusations of overstating earnings, hiding massive debt, diverting millions of dollars in company funds for their personal use, using questionable accounting practices, and obstructing justice. Is it any wonder many employees develop biases that lead them to associate their leaders with dishonesty and untrustworthiness?”

Brymer sees a direct correlation between the publicity surrounding the recent convictions of corporate leaders like ex-Tyco chief Dennis Kozlowski and WorldCom’s Bernie Ebbers, and waning employee trust. “Thanks to these corrupt officials, many employees are now looking at their own bosses, even frontline supervisors, with unwarranted suspicion,” he says. “Employees everywhere are perpetuating stereotypes associating leaders at every level of their organizations with a lack of credibility—even if those leaders haven’t done anything unethical. As a result, establishing trust with employees is an uphill battle for even the most ethical leaders.”

“We’re seeing the effects of these scandals in the behavior of jobseekers, too,” adds Brymer. When selecting employers, he points out that job candidates are focusing less on the financial rewards and more on the company’s values. “Today, people seek out employers who emphasize their core values, and whose values are consistent with their own.”

For many companies, diminishing trust also means reassessing their approaches to retention. “Trust and employee loyalty are interdependent,” says Brymer. “Studies show that when employees mistrust their leaders, or are ashamed of their behavior, they are more likely to leave. So these scandals, and the stereotypes they perpetuate, create a challenging time for retaining employees.”

Brymer says that, more than ever, employees are searching for leaders with integrity who prove their credibility continuously. In leadership, credibility means consistency between an organization’s spoken values and its leaders’ actual behavior. To prove their credibility, he stresses that leaders must repeatedly exhibit their faithfulness to their organization’s values by habitually demonstrating them in action each day. “Do that,” he says, “and your leadership will have far greater impact—all because your can’t-miss-it credibility underscores your integrity as a leader.”

George Brymer is the author of Vital Integrities, the groundbreaking guide to leading in the age of corporate scandals. A popular speaker, George has lectured on leadership, business ethics, and board governance to corporate, nonprofit, and association audiences around the country.

George has nearly three decades of leadership experience, including nineteen years working for a Fortune 500 bank. He is the creator of The Leading from the Heart Workshop®, a three-day program that teaches values-based leadership in a fun, encouraging, and hands-on environment. The inspiration for his first book, Vital Integrities, came from his experiences, research, ideas, and enthusiasm for the craft of leadership.

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