Review by Choice Review
Enron practiced the worst of corporate management and governance: accounting misstatements; lying, fraud, and deception fueled by greed; and ambition, arrogance, and brilliance that overwhelmed responsibility and good judgment. McLean (former investment banking analyst) and Elkind (both writers at Fortune) present an informed and insightful corporate history of Enron, from birth (1985) to bankruptcy (December 2001) and a bit beyond, detailing the trading activities (gas, electricity, broadband) and acquisition of "hard" assets. Public accounting reports were purposely deceptive. The accounting fabrications were driven by a desire to "make the Numbers" (to meet Wall Street's expectations), thus boost the stock price and inflate the value of executives' bonuses and stock options. Wall Street was gulled; investors wondered just how Enron made its profits, but did not doubt that it made a lot. The authors' explanations of financial abuses are clear; the writing engaging; the story fascinating to anyone interested in corporate governance and executive management. Particularly strong are the accounts on the misalignment of stockholders' goals and executive incentive plans, and the perceptive portraits of individuals at the top. Of the volumes on Enron to have appeared, this is clearly the best. This reviewer awaits the sequel. ^BSumming Up: Highly recommended. Public, academic, lower-division undergraduate and up, and professional library collections. R. A. Miller Wesleyan University
Copyright American Library Association, used with permission.
Review by Publisher's Weekly Review
Fortune reporter McLean's article in early 2001 questioning Enron's high valuation was cited by many as an early harbinger of the company's downfall, but she refrains from tooting her own horn, admitting that the article "barely scratched the surface" of what was wrong at America's seventh-largest corporation. The story of its plunge into bankruptcy (co-written with magazine colleague Elkind) barely touches upon the personal flamboyances highlighted in earlier Enron books, focusing instead on the shady finances and the corporate culture that made them possible. Former CEO Jeff Skilling gets much of the blame for hiring people who constantly played by their own rules, creating a "deeply dysfunctional workplace" where "financial deception became almost inevitable," but specific accountability for the underhanded transactions is passed on to others, primarily chief financial officer Andrew Fastow, whose financial conflicts of interest are recounted in exacting detail. (Skilling seems to have cooperated extensively with the authors, though clearly not to universal advantage.) A companywide sense of entitlement, particularly at the top executive levels, comes under close scrutiny, although the extravagant habits of those like Ken Lay, while blatant, are presented without fanfare. The real detail is saved for transactions like the deals that led to the California energy crisis and a 1986 scandal, mirroring the problems faced a decade later, that left the company "less than worthless" until a last-minute rescue. The book's sober financial analysis supplements that of Mimi Swartz's Power Failure, while offering additional perspectives that flesh out the details of the Enron story. (Oct. 13) (c) Copyright PWxyz, LLC. All rights reserved
(c) Copyright PWxyz, LLC. All rights reserved
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