Ken Lay, former chairman on Enron, has been indicted. This isn’t something that we would normally care about at EphBlog. But, in this particular controversy, Bethany McLean ‘92, author of The Smartest Guys in the Room, is one of the experts.

If you only have time to read one book about the excesses and scandals of the business world during the bubble years, you should read McLean’s.

Although I can’t find any comments by McLean on Lay’s indictment (most of her articles for Fortune are not accessible), she does note that:

Enron’s board of directors was infatuated with executives they hired.

“The board fell in love with the management at Eron,” she told the forum. “Enron’s board forgot who they worked for - the shareholders.”

She said the abuses occurred even though Enron’s corporate structure had a separate chairman and CEO in place. “There was a belief that these (management) people were just so incredibly smart,” she said.

You can read McLean’s original article on Enron here.

One of the reasons that I spend so much time on compensation issues at the College is that is seems obvious that the same forces that drove pay to such extremes in the business world are starting to have an effect at Williams.

As I always, we at EphBlog stand second to none is praising the job that Morty is doing. Yet is that really enough of a reason to pay him twice what we paid Frank Oakley just 10 years ago? I don’t think so.