Washington, October 22:
Most of Enronâ€™s directors went to ground after the energy group collapsed in late 2001, but five years on some are still in boardrooms. Ho-wever, not many care to admit their controversial past.
Unlike former chief executive Jeffrey Skilling, who was due to be sentenced Monday for his role in the Enron accounting scandal, and other jailed executives, none of the non-executive directors who sat on Enronâ€™s board at the time of its demise has been prosecuted. However, 10 of the 18 Enron directors who sat on the board at the time of its implosion did agree to pay a collective $13 million to settle charges by Enron shareholders that they had engaged in insider dealing.
Once the seventh biggest company in the US, Enron filed for bankruptcy in late 2001 after its shady off-the-books financial deals, which some top executives had used to enrich themselves, became public. A number of Enron directors, who had previously risen to the top of their fields in business, government and medicine, have tried to continue their careers, albeit quietly.
However, many of the directors who did try to revive their careers omit to mention in their biographies that they served on the Enron board. Former director Frank Savage sits on the boards of Lockheed Martin and the Bloomberg financial news group. His Lockheed Martin biography notes his â€˜distinguished 33-year career in international banking and corporate finance,â€™ but makes no note of his time at Enron.
Another ex-director, Ronnie Chan, is the chairman of the Hong Kong-based Hang Lung Properties gro-up, but again his biography makes no mention of Enron. Wendy Gramm, another ex-director who is married to former US senator Phil Gramm, is a scholar at George Mason Universityâ€™s free-market Mercatus Centre near Washington, where she has advocated energy industry deregulation.
Grammâ€™s Mercatus biography touts her government career, but again contains no reference to her one-time Enron directorship. And the online biography of another former Enron director, John Wakeham, highlights his parliamentary position in Brita-inâ€™s House of Lords and support for a number of charitable organisations, but makes no reference to his days spent advising Enron.
Jacob Zamansky, a New York securities lawyer and principal of Zamanksy and Associates, notes that the Enron directors have been sued in a civil case, but are unlikely to suffer further sanctions. â€œAt best they wer-e asleep at the wheel,â€ said Zamansky, who has follo-wed the Enron trial closely.
â€œTo bring a criminal case you have to show beyond a reasonable doubt that they were involved in intentional fraud, and thatâ€™s a bit of a stretch in this situation.â€ Congress and US regulators tightened up corporate oversight after Enronâ€™s implosion, and some experts say directors have generally become tougher guardians.
â€œThereâ€™s no question that standards have improved and the amount of questioning and activity is much greater today than it was pre-Enron,â€ said Harvey Goldschmid, a former Securities and Exchange Commission commissioner who is now a law professor at New Yorkâ€™s Columbia Un-iversity. â€œDirectors to some real degree are dependent on good disclosure and what we call the gatekeepers, accountants and lawy-ers and others, and the pressures on gatekeepers to get information to indepe-ndent directors on the bo-ard is much greater today than it has ever been.â€
Charles Elson, the director of the University of Delawareâ€™s corporate governance center, agrees that director independence has improved.