Enron's Woes: Who Knew? (Fiscal Responsibility).

The recent financial debacle that caused Enron's fall has many investors asking questions, including this one: How much did Enron's board of directors know about the company's investment decisions? A December 2 Washington Post article indicates that the board could come under scrutiny as Enron's financial records are examined. The situation calls to mind the importance of fiduciary responsibility and full disclosure. According to the article, board member John Wakeham received $72,000 last year from Enron, in addition to his director's fee, for some consulting advice. And Enron has contributed to George Mason University, where another board member heads the regulatory studies program.

"Charles O'Reilly, a Stanford University business school professor, said that while such donations rarely 'buy' the cooperation of directors, they do indicate the problem when chief executives and directors develop a 'pattern of reciprocity' in which they do favors for each other and gradually become reluctant to rock the boat, particularly on complex accounting matters," the article notes.