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No Excuses

On the witness stand in the trial of former Enron bosses Kenneth Lay and Jeffrey Skilling, the company's ex-CFO Andrew Fastow testified that Skilling instructed him to "give me all the juice you can" by falsifying earnings. Translation: create phony partnerships to cover up hundreds of millions of dollars in losses and hide billions of dollars of company debt. Fastow, who previously pleaded guilty to helping pump up Enron stock by scamming Wall Street analysts, is now a government witness against his former employers. "We were using this to inflate our earnings," admitted Fastow.

Legal experts call Fastow's "I was only following orders" explanation the Nuremberg Defense, a term coined because so many defendants invoked it during Nazi war criminal trials. Does Fastow's claim that Skilling made him do it excuse his actions? Of course not, but it does highlight a growing problem: pressure from management to meet unrealistic business objectives is the leading cause of unethical corporate behavior, according to a new American Management Association survey. In other words, when hierarchical rank looms threatening overhead, imposing its unethical demands, puppets like Fastow exhibit an unquestioning, even fearful, reverence for authority.

If you think standing up to unscrupulous demands from above is risky, you're right. But consider the courageous actions of another former Enron leader, vice president Sherron Watkins. In August 2001, Watkins boldly warned Lay that the company was using shady accounting practices—specifically, off-the-books deals secured only by devalued Enron stock. Initially believing she had discovered trouble unforeseen by senior management, she expected Lay to intervene. When a cover-up ensued instead, she took it upon herself to report her company's bad behavior. Her remarkable bravery in risking everything for her distinguishes Watkins from her coworkers who caved in to the pressure and blindly deferred their moral choices to outside authorities.

If you're not standing up to unethical behavior at work, what's your excuse?
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