What does the Scrushy case have in common with other corporate scandals?
Lacey: In all of these cases we find a number of common elements. First, there is a CEO, and often a group of other senior executives, who have very large egos and strong personalities. Rather than use a team approach to collecting and evaluating information, these executives will dictate that their subordinates achieve financial and other goals that appear completely unrealistic. The subordinates will then either use illegal methods to obtain those results, or they will fall short of the goals but will falsely assert that the goals were achieved by reporting inflated financial results. In some cases, the executives will specifically direct that false information be reported, but more often it is a subtle suggestion by the senior executive to rationalize the false report as being insignificant. Second, the directors, who are charged with overseeing the company’s overall operations periodically, and other executives will be reluctant to challenge the CEO’s authority or to impugn his cha
