This is NOT the Day

Background to this speech -

The year is 2001, and the world was just hit with the news headlines “Enron Corporation, American’s energy giant sued for Accounting fraud. Top Accounting Firm Arthur Andersen implicated.” We all know this bit of the history and also know the outcome, so I will be using the company names as it is in my speech. This is a hypothetical scenario based on historical facts. The scene is an emergency communication session arranged at the Arthur Andersen office in Singapore, located somewhere in Shenton Way. The person addressing the employees is the CEO of the company.

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Good morning. Thank you for attending our communication session today at such short notice. I believe by now you have read the newspaper this morning and especially on the headline article that we, Arthur Andersen has been implicated by our largest client, Enron Corporation in US due to accounting fraud. I am sure this comes as a shock to many of us. We certainly did not see it coming.

The purpose of this communication session is to help clarify the situation and most importantly, alleviate any concerns you may have. First, allow me to state the facts and as professionals, I will not mince my words. I will table the facts in front of you, and you judge for yourself what the situation is really like.

Yes, it is true that our largest client, Enron Corporation has been sued by the US Government on the grounds of falsifying their accounts. They have found many of Enron's recorded assets and profits to be inflated or even wholly fraudulent and nonexistent.  They claimed that Enron has put their debts and losses into entities formed "offshore" that were not included in the company's financial statement, and they used other sophisticated financial transactions to eliminate unprofitable entities from the company's books. And yes, it is true that as the company’s appointed auditor, our accounting performance and standards also came under intense scrutiny. We are being suspected of helping Enron perform unethical accounting practices.  I understand the shock many of you had when you saw the article this morning. I know you cannot believe what you read, and I fully felt as hurt and as wronged as each and every one of you.  So please allow me to assure you, to my best knowledge as the head of the management of our Singapore office, we are simply assisting in the investigation of Enron, but, we are not sued in any way.

My management team knew about this newspaper release just yesterday, and we have had numerous calls with our US headquarters to seek clarification on the situation. I am pleased to inform you, as of now, our US headquarters is confident that this is a misled investigation, so we would like to assure you – if we are ever called a fraud, it won’t be today. This is not the day for Arthur Andersen to have his reputation tarnished, for 2 very simple reasons.

No 1. Enron Corporation Enron Corporation is an American energy, commodities, and Services Company based in Houston, Texas.  Enron currently employed approximately 20,000 staff and is one of the world's major electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion last year. Fortune magazine named Enron "America's Most Innovative Company" for six consecutive years since 1996. It is on the Fortune's "100 Best Companies to Work for in America" list last year as well. The whole world knows that Enron is hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers and extremely effective management. How could such a well-established, award-winning, high profit generating company be found to be a fraud overnight? Trust me, such things only happens in movies, not in the real world.

No 2. We, Arthur Andersen, have always been known to be the market leader in stringent, superior, successful accounting practice. Remember our Founder, Arthur Andersen himself?  When he was alive, he was a zealous supporter of high standards in the accounting industry. A stickler for honesty, he argued that accountants' responsibility was to investors, not their clients' management. He cannot be bought. Remember his reputation in the 1920s, Andersen was approached by an executive from a Chicago rail utility to sign off on accounts containing flawed accounting, or else face the loss of a major client. What did Andersen do? He refused in no uncertain terms, replying that there was "not enough money in the city of Chicago" to make him do it. That’s how honest he was. And that’s how honest we remain! Remember our company’s motto? "Think straight, talk straight." Such an ethical company, should we, can we, will we ever be called a fraud? Or even accused of supporting fraudulent practices? Never!

My fellow colleagues, I cannot say enough how much I understand the worries you have. Will Arthur Andersen have to give up our practicing license as auditor and never be allowed to practice again? Will all our clients run away by such damaging rumours? And most importantly, will we lose our job? I have to admit this is certainly a great blow to us, but we are Arthur Andersen, we do not fall that easily! So chin up everyone and brace the storm. Today is not the day for us to go down in history. Today is not the day for our clients to lose faith in us. Today is certainly not the day we abandon our employees. We remain committed to our shareholders, our clients and most importantly our employees.

We urge you to bear with us. We can ride this storm so long as we have your support. So who is with us?

Thank you, TMD.

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This is an advanced project in the Speech by Management manual - Delivery Bad News. It was very difficult to develop a speech with the right content of "bad news" and yet make it inspiring. The inspiration of this speech comes from the movie Lord of the Rings, where Aragorn calls his army to fight the hopeless war against the enemy at the Black Gate:

“Hold your ground, hold your ground! Sons of Gondor, of Rohan, my brothers! I see in your eyes the same fear that would take the heart of me. A day may come when the courage of men fails, when we forsake our friends and break all bonds of fellowship, but it is not this day. An hour of woes and shattered shields, when the age of men comes crashing down! But it is not this day! This day we fight! By all that you hold dear on this good Earth, I bid you stand, Men of the West!” JRR Tolkien

Of course, this speech is nowhere near the splendor of the original speech by Aragorn, neither can it be compared to the emotional uplift that it created.

This is fictitious event; there was no such emergency communication done and none of any part of this speech was ever lifted from any known person. I would, on hind side, loved that such a communication session was indeed conducted. It may have changed the course of life for many then employees of Arthur Andersen, mine included.