Life is a sine curve. Rules are set up. Cheating and scandals take place. We patch up and try to correct past wrongs. And things are OK for awhile and then something else takes place.
In the sine curve of industrial behaviour/corporatism/rules, regulations and oversight....the question for me is are we heading toward a long run asymptote toward the base...or over the long run is the sine curve heading up. (mathematicians and statisticians on FW forgive any errors or liberties I have take around sine curves and asymptotes.) arthur -----Original Message----- From: Keith Hudson [mailto:[EMAIL PROTECTED]] Sent: Saturday, January 26, 2002 4:09 AM To: [EMAIL PROTECTED] Subject: Transparency This morning's news is of the suicide of Clifford Baxter, the senior executive of Enron who understood its complex structure -- in particular the reasons for thousands of subsidiaries that were used to hide losses and avoid tax -- and who resigned last August. Despite the enormity of the Enron scandal, it is no different from other scandals that occur periodically. It's no use blaming businesspeople as a class because our economy survives only by means of business -- that is, one person or group exchanging A for B from another party. Most businesspeople are honest because they know that unless their customers are satisfied with a particular transaction it won't be repeated. (This is a generalisation, of course, but it applies to most of our daily transactions.) However, at any one time there are individuals who enter into business in order to defraud others. There are also individuals -- and Enron seems to fall into this category -- who adopt fraudulent behaviour somewhere along the line within a legitimate business when tempted by greed or to cover up an unviable operation. Sometimes, this involves corrupting those who seek to protect us -- politicians in government. It was realised a long time ago that the one sure principle that would expose fraudulent practice is transparency of information. This was the basis of the first Company Acts laid down in England in the 19th century by which companies (that is, potential conspiracies of fraudulent individuals) had to supply year-end financial accounts for the public record. This was revolutionary at the time. Since then, governments have added much more legislation and also, in more recent years, have given legal clout to powerful regulatory bodies. However, more often than not, it's been a matter of closing the stable doors long after the horses have fled. Although much fraudulent business practice is exposed by regulatory bodies, new frauds are constantly invented which evade existing legislation. The time has now come now for the principle of transparency of information to be carried much further because we now have the technology to make this entirely practicable for the vast majority of businesses. This is that copies of *all* information -- not just financial -- that is involved in the normal daily practice of a business should be available for public inspection. In this way, we could increase the likelihood that fraudulent practice would be exposed long before it could be specifically outlawed by legislation and come to the attention of regulatory bodies. We are, in fact, already groping towards this principle of total transparency because past records of businesses can be subpoena'd by a court of law (so long as they are not shredded!). Until recently, it would have been impossible for copies of all voice and text information within a business to be copied and stored. Today, with the ever-decreasing cost of memory chips, it is an entirely practicable procedure. I think this will become inevitable in due course. Perhaps we ought to start thinking about this now because it is inevitable that other scandals will occur in future years that will be even greater than Enron adn cause even greater distress. Keith Hudson __________________________________________________________ "Writers used to write because they had something to say; now they write in order to discover if they have something to say." John D. Barrow _________________________________________________ Keith Hudson, Bath, England; e-mail: [EMAIL PROTECTED] _________________________________________________
