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Richmond, Virginia

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CEO Responsibility

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CEO accountability is in the headlines as we watch star witness, Andrew Fastow, being cross-examined by the defense attorneys for Ken Lay and Jeff Skilling, in the Enron jury trial. Relevant to this is a bill which has recently been introduced by Pennsylvania Senator Arlen Specter, which will attempt to hold CEOs accountable for manufactured products that are dangerous and cause harm to the consumer.

In watching the defense of Ken Lay and Jeff Skilling, we are seeing a preview of what every CEO would attempt to argue in defense to Senator Specter’s bill. No CEO will want to be held accountable and, these powerful high earning CEO’s are reduced to claiming that they are “not in charge” or “delegated it to someone else” when it comes to such accountability.

Senator Specter’s bill appears to be aimed at such companies as Guidant, which manufactured defibrilators that have come into question; Merck, which is under scrutiny relating to it’s Vioxx drug; and Ford for it’s Pinto or Firestone for it’s tires. If Senator Specter’s bill became law, then civil liability would not be the only thing being called into question when these companies have to answer for creating dangerous products.

We can expect to see an avalanche of lobbyists on behalf of these big companies, fighting to keep this bill from seeing the light of day. You would expect that Senator Specter, with his powerful chairmanship of the Senate Judiciary Committee, to have the political capital to be able to get such a bill to the floor of the Senate. However, when it comes to CEO accountability, we can expect that the powerful and their lobbyist will keep all stones from being unturned.