To Shred or Not To Shred

In the midst of the Enron scandal--where executives at one of the largest U.S. corporations allegedly hid information about the company's poor financial health so they could sell their overvalued stock--comes the firing of a senior auditor at the Arthur Andersen consulting firm.

As reported by The Columbus Dispatch online (1/15/02), the auditor was fired for ordering the destruction of documents related to Enron, one of its major clients. Other Andersen employees involved have been demoted or placed on leave.

Federal investigators are seeking documents as part of their ongoing investigation into alleged wrongdoing at Enron. The corporation's stock price plummeted last year, and Enron filed for bankruptcy and laid off thousands of employees. Many employees who owned Enron stock were unable to sell it, so they saw their retirement accounts evaporate.

Criminal charges may also be brought against those involved.

Shredding documents may have ethical and legal ramifications--know what you are to keep and choose wisely what is to be destroyed. In particular, personnel and financial documents should be retained according to industry and government guidelines.

Remember, too, that a watchdog audience may have the authority to request documents years after they have been produced. Even if documents--including emails--seem unnecessary, you may find yourself being subpoenaed by lawyers or investigators to later produce that document. Destroying such documents may, in fact, be illegal. For more information on watchdog audiences, see Module 2.

When in doubt, save documents. Without resorting to illegal or unethical acts, avoid putting in writing anything you believe might cause problems later. The best course of action is to be honest and ethical--follow the law, and you're unlikely to face trouble.