Enron grew from being a medium-sized oil pipeline operator into a global giant in energy trading. Much of its new business was sound enough; there was a need for intermediaries to carry out that function. But when growth and profits faltered, the corporate management basically cooked the books.That led to the second failure: the auditors allowed all sorts of dubious accounting practices to pass unchecked, so that the company’s accounts in effect concealed the damage that had occurred. When the pretence could no longer be kept up, the accounts had to be rewritten and the company folded.But the management, and its auditors, would not have been allowed to carry on for so long had they not had the active support of the investment banking community. Supposedly independent analysts puffed Enron shares while their colleagues on the other side of the business were raising new funds for the company or supporting it in takeovers and mergers. This was the third failure.Now, a year later, all three failures are in the process of being corrected.

Enron is in Chapter 11 bankruptcy and its auditor, Andersen, is history – the capital punishment of the capitalism system. That in itself will have a profound effect on the way executives both in companies and accoun- tancy firms behave in future.More than this, the various devices used by Enron to conceal what was really happening – in particular creating private companies that took liabilities off its books – have been outlawed. Com-pany officers in the US have now, in the face of criminal penalties, to testify that the accounts are correct – something one might reasonably have assumed they should have been required to do before. And the culture of corporate morality will be changed by all this; having to admit that past accounts have been wrong is not acceptable.The arrangements for accountants are also being changed. The final outcome is not yet clear but it looks as though European and in particular UK-style accounting, which is more rigorous than that practised in the US, will be adopted. And some degree of separation between auditing and consultancy will be introduced.Finally, there will be changes in investment banking. Again the final outcome is not clear, but several investment banks in the US have had to pay fines for misleading research.

There may be a more formal separation between research and corporate finance, but even without that, the investment banks know they will have to be seen to be more independent.Will all this make a difference? Yes, for a while. Killing one of the largest companies in the US and one of the biggest accountants in the world has had a huge impact Humiliating the investment banks will force change too So capitalism will be sweeter .. until the next storm breaks.. “Yes, Customs has come into the public eye lately,” admits Richard Broadbent, the high-flyer who moved from Schroders, the investment bank, to run Customs & Excise two and a half years ago at the tender age of 46. After all, we deal with half the tax revenue that is raised and a quarter of serious crime.”Broadbent was the first non-civil servant to became a permanent secretary and took on a 23,000-strong government department with a budget heading towards £1bn a year. This high profile has highlighted (more caught in the searchlight) the work of Customs, with The Sun especially taking pot shots at it.From recent reports you’d have thought that Customs & Excise is a heartless, bureaucratic and possibly bent organisation, persecuting pensioners over a few hundred fags from Calais while drug smugglers flourish.Perhaps more worrying for Broadbent is that he was brought in to sort out the bureaucratic behemoth. Tony Blair decided Customs needed a radical shake-up for its failure to tackle enormous revenue losses over our borders since we joined the EU in 1993.Has Broadbent improved the organisation? A confident well-spoken man, he likes to bring private sector discipline to the public sector.”You cannot change an organisation overnight My own view is that we have done quite a lot We have restructured the organisation It was rather fragmented There have been a lot of management changes. We have set out to analysethe problems and formulate strategies to deal with those problems.”Analysis leading to strategy is a constant theme in Broadbent’s management method.Born in 1953, he is a graduate of Queen Mary College and has an MA from Manchester University.