Welcome to this course on ethical decay. Our trust in leaders across society is in freefall, driven by countless scandals and corruption, demonstrating egregious greedy behavior by leaders in all sectors, with global trust levels below 30%. does this imply that 70% of the people in the world today lack ethical integrity? How is it that good people go bad? What happened to our morals? In this lesson, we will briefly look at one of the most notorious convicted felons in finance and learn that often, we do bad things not because of greed, but because of the environment we're put in.

When you graduated from university, or received your professional designation, I'm willing to bet was highly unlikely that you or any of your classmates set out on a path to commit fraud. So what happens to those people who do commit fraud between graduation The prison cell. Andrew Fastow is the former CFO of Enron, the confessed mastermind of the complex network of off balance sheet special purpose entities that conceal the massive losses. He served five years in prison for his role in Enron, and today is now a speaker on corporate fraud. How the mighty fella Enron, unbelievably in 2000. Faster was CFO magazine's CFO of the year, only a year later, he was labeled as one of America's greatest white collar criminals.

What happened? consider some of these quotes to illustrate just how slippery the slope is between being CFO of the year and America's greatest white collar criminal. You can follow all the rules and still commit fraud at the same time. I didn't set out to commit fraud. I didn't set out to hurt anybody. Every single deal I did.

Enron was approved by The accountants at Enron, the outside auditors, the internal attorneys, the outside attorneys, and the Board of Directors, how can you get approval from all those people and still commit fraud? At Enron, I found every loophole in the finance and accounting area. My title was CFO, but I should have been called chief loophole officer. I undermined every principle possible. The rationalization he was telling himself was if there is complexity and ambiguity, it gives me greater latitude to do what I want to do. Never when I did these transactions, did I think about ethics.

I simply said, we have a rulebook, it's amoral, just a bunch of rules. Once you rationalize this decision, as perfectly fine as being good for the shareholders, for the consumers, you've just crossed the threshold into a world where you're saying it doesn't matter what the principle of role was, as long as we're acting Technically following the rules, ethical dilemmas exist all around us and most of us go about our work without even recognizing the ethics of the decisions we're making. When you're in the business world, it's a lot harder to recognize unethical situations and you think so What causes good people to make poor ethical decisions? Is it fear, the fear of rejection, the fear of not being cool, the fear of reprisal? Does that drive us to make poor judgments? How about short termism?

When we overemphasize the benefits we receive now and downplay costs that may happen later? Or maybe it's just impulsiveness. We have a temper a nasty moment, respond in a hurtful way to a situation. We make decisions on the fly. Ethical decay is hardwired into our brains and overcoming it takes conscious awareness and are straight. In the lesson that follows you we'll look at some of the ways are bright undermined our ethical judgment.