Long before Thursday's guilty verdicts against Kenneth L. Lay and Jeffrey K. Skilling, the Enron Effect was already changing U.S. corporations.
Houston oil service company Dresser-Rand Group Inc., conscious of the public outrage that followed Enron Corp.'s 2001 collapse, uses its website to wave the flag of corporate good behavior, touting its toughened-up ethics policy. Engineering giant Fluor Corp.'s new code of conduct includes a final section titled "Exceptions" that consists of one word: "None." And Boeing Co., caught in contracting scandals of its own, now internally publishes examples of company wrongdoing and the punishment meted out to wrongdoers.
These days "you obviously have to be very certain that your compliance procedures are without question," said Randy Rincella, Dresser-Rand's general counsel.
The convictions of former Enron leaders Lay and Skilling put an exclamation point on a government crackdown on fraud -- sparked by the energy giant's stunning 2001 collapse into bankruptcy -- that is having a surprisingly broad effect on corporate behavior.
"Nothing focuses the mind like the knowledge you will be hanged in a fortnight," said Columbia University securities-law professor John Coffee.
In the years since Enron's demise, the percentage of the population with a favorable opinion of big business, already slipping for decades, has fallen further.
New laws and regulations have prompted companies to establish stronger ethics policies. Investors are holding publicly traded companies more accountable for their pay practices and board structure.
And, in what may be the most lasting legacy, a sea change in public opinion toward business has made a broad swath of corporate activity fair game for criticism.
Top executives "are really frustrated," said Stephen Jordan, executive director of the Business Civic Leadership Center at the U.S. Chamber of Commerce. "They feel like business is probably as progressive and as engaged with society as it's ever been. They're doing more than ever before, but the demands are still going up."
To be sure, wrongdoing hasn't vanished from the executive suite. In 2005, 52% of employees surveyed by the nonprofit Ethics Resource Center said they had seen improper behavior on the job that year, about the same as in years past.
"The percentage of people who are interested in cheating is probably the same as 10,000 years ago," said Timothy Fort, business ethics professor at George Washington University. "I don't think there's any fix for that."
