In terms of the incident involvingEnron as depicted in the film Enron: TheSmartest Guys in the Room, I would disagree with Mr.
Mackey withabsolution. Business social responsibility should be nurtured but, like manyother instances in human existence, individuals will not always act with thebest intention with regard to how they should with contractarianism in mind. Fastowand other executives at Enron used unethical financial reporting practices thatwere misleading to not just stockholders, but also stakeholders. The lack ofregulation over their shuffling of assets and liabilities in conjunction withthe lack of ethical auditing practices from Arthur Anderson LLP resulted in adirect impact involving. The loophole they had identified and abused exerciseda complete disregard to social responsibility as a trade-off for personalfinancial gains. Anotheroften paraphrased quote that I like, which dates back to 1906, is from GeorgeSantayana and reads: “Progress, far from consisting inchange, depends on retentiveness.
When change is absolute there remains nobeing to improve and no direction is set for possible improvement: and whenexperience is not retained, as among savages, infancy is perpetual. Those whocannot remember the past are condemned to repeat it.”Looking further back, LordActon penned “Power tends to corrupt, and absolute power corruptsabsolutely. Great men are almost always bad men” in 1887 (Dahlberg & Acton).A few thousand years moreinto history, the Greek philosopher Plato introduced these same ideas with theRing of Gyges. For those unfamiliar with the Ring of Gyges, in summation, thismagical ring enabled the wearer to turn invisible.
Plato postulated that eventhe purest of man with the most noblest of intentions would use the ring formisdeeds. Rather bluntly, Plato stated in the Republic, “If you could imagine any one obtaining this power ofbecoming invisible, and never doing any wrong or touching what was another’s,he would be thought by the lookers-on to be a most wretched idiot…”(Plato). Whileit is reasonable to wish that individuals would act ethically when at thecrossroads of a moral or ethical dilemma, only the fool would believe theywould at every opportunity. Individuals behaving immorally, unethically, andinhumanly is the very reason we have laws. Thus, law’s role with regard toethics is to encourage behavior that which is acceptable for the society.
It isunreasonable to assume that every situation can be accounted for so a completeregulation through policy is not reasonably achievable. However, that isn’t tosay we shouldn’t regulate at all. The policies and laws should be written withenough clarity that enforcement can be exercised. The reward for violatingthese rules should be clearly spelled out and applied in accordance with thedegree of violation.
Through these means, the expectations of appropriate andlawful behavior can be reasonably expected so that risk of using a Ring ofGyges is not worth the potential rewards.