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Member, Beacon International Group, Ltd.
KEELE, England Another Enron Corp.-like corporate scandal could happen within the next five years, according to a survey of risk managers and insurers attending the Institute of Risk Management's annual conference being held at Keele University in Staffordshire, England.
More than 85% of the 350 attendees at the two day conference agreed that that another "Enron" will occur in the next five years in a live vote conducted by the IRM.
Some 94% of delegates said that they believed that the legislative changes enacted since the demise of Enron have not been sufficient to stop a similar scandal occurring again.
The vote followed a keynote speech from Lynn Brewer, a former executive at Enron and one of the "whistleblowers" who described how the "corporate culture" at Enron contributed towards its collapse in 2001.
"There is no doubt that the keynote address from Lynn Brewer, dispelled any preconceptions our audience might have had that Enron was an isolated event," commented Steve Fowler, chief executive of the London-based IRM.
"It is the softer issues such as corporate culture and remuneration that are (according to Ms. Brewer) leading indicators of whether or not a company was likely to have integrity issues.
The fact that Enron employees at all levels were heavily rewarded through stock option schemes was one of the reasons that they were disinclined to report any problems as the share price kept rising.
These softer issues are not subject to legislation, but are crucial to helping to shape how a company and its employees behave," Mr. Fowler said.