|
« AAUP Homepage
|
From the General Secretary: Enron and Governance
By Mary A. Burgan
Early this year, in a session designed to reassure Congress and the American public that the economy was going to be okay, Alan Greenspan, chair of the U.S. Federal Reserve Bank, said not to worry about the collapse of Enron, the former energy giant. Enron’s failure did not denote a structural problem in the U.S. economy; it was a failure of corporate "governance." Given that professors were told, throughout the nineties, that the faculty form of "governance" had to give way to the efficiency and effectiveness of the corporate model, we now have a right to analyze what the chair of the Federal Reserve might have had in mind when he mentioned Enron’s failed governance.
As an English professor, I tend to read financial news reports as if they were chapters in a novel by George Eliot. I look for the various forces that have created the social mise-en-scène, the assertions of ego that have powered the leading characters’ dealings, the occasional examples of sacrificial truth telling by extraordinary characters during a crisis, the complications of the denouement, and (since I’m a specialist in Victorian literature) the satisfactions of the concluding moral. And so with the Enron tale.
The unraveling of Enron is the story of a highly successful enterprise whose managers decided that the engine of all future growth was to be the art of the deal. Success depended on reliance upon this thoughtless principle. Such hubris led to a culture of intense and unremitting competition inside Enron. The benchmarks of corporate success were not only profitability and an "irrational exuberance" among shareholders, but fame in rankings of corporate success. Enron was declared the "most innovative company in America" for five years running by Fortune magazine—and it was also ranked number twenty-four among the "hundred best companies to work for in America," according to its own Web page blurb (last updated in January 2000). Collegiality failed, however, when survival depended upon playing, not questioning, the game. Whistleblowers feared for their jobs, and those with the courage to speak were put under a cloud—offices moved, promotions deferred, perks denied.
Tentative questioning from an outside source—an article in Fortune in 2001—was quickly turned aside by corporate spin. We now know that the veil within Enron was lifted when a single, somewhat fearful vice president sent a memo to the CEO. But a single letter was not enough to get his attention, and there were no others. The competitive motive had nullified the safeguards of a free and independent workforce. Further, corporate accreditation failed; auditing standards, those external safeguards set up to protect both companies and consumers, were too enmeshed with Enron’s profit making to warn of dangers ahead.
Such features of Enron should be a warning to other kinds of accreditation and governance, but the corporate model continues to influence academic managers, who seem to think that all facets of education should work for the market and that "shared governance" is window dressing rather than a necessity. The most callous disregard of faculty autonomy these days comes from academic leaders who have embraced the notion that managerial excellence requires a totally obedient and regimented workforce.
The criterion of "team playership" still influences personnel decisions, even as Enron illustrates the critical importance of fostering the loyal opposition within corporations. In lockstep with mistaken corporate practice, some of the current higher education policy wonks argue that tenure needs to be adjusted to make faculty less hard on the leadership of their CEOs. We continue to hear the discredited assumption that success requires instantaneous decisions, absolute compliance to them, and the nimbleness to move from one profit center to another without bothersome academic debate.
Enron makes it clear that without some kind of tenure in their jobs, professional workers outside academe are likely to remain silent until the boom turns to bust. Surely it has also confirmed our suspicions that corporate executives don’t always run things very well in business? That CEOs need to be watched and told on, by free and independent professionals?
Enron also makes it clear that businesses need the truth as much as universities do. Alan Greenspan has opined that corporate governance will right itself when values like integrity achieve a market value high enough to compete against market hype. Through a principled defense of academic freedom through the exercise of shared governance and the maintenance of tenure, the faculty has managed to preserve American higher education from the vagaries of the market since 1915, the year of the AAUP’s founding. Perhaps we could teach the guru of the Fed a thing or two?
|