Business Roundtable statement on corporate governance principles criticizes Enron’s ‘massive breach of trust’

WASHINGTON, Feb. 11, 2002 — Following release of the Enron board’s internal Powers Report and a week of congressional hearings, The Business Roundtable (BRT) issued a statement today on Enron’s management failures and outlining strong corporate governance principles and policies.

According to the statement, the BRT “believes that the actions and behaviors (of Enron’s management) … which contributed to the collapse of the company are unacceptable,” revealing “a pervasive breakdown in the norms of ethical behavior, corporate governance and corporate responsibility to external and internal stakeholders.” The statement says the Enron situation appears to have derived “fundamentally from a massive breach of trust.”

The statement also notes that the “collapse of the Enron Corporation is a profound and troubling exception to the overall record of success” of the U.S. corporate governance, financial reporting, and securities market systems. “These systems work because of the adoption of best practices by public companies within a framework of laws and regulations,” the statements says. “No law or regulation alone can be a substitute for the voluntary adherence to these principles by corporate directors and management.”

The Business Roundtable is an association of chief executive officers of corporations with a combined workforce of more than 10 million employees in the United States and $3.5 trillion in revenues. The chief executives are committed to advocating public policies that foster vigorous economic growth and a dynamic global economy.

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