What Enron Taught Us About Culture, Silence, and the Cost of Not Asking Questions

By Todd Wentz, CEO, Wentz IT Consulting

Enron wasn’t just a story about bad accounting—it was about culture. A culture that punished dissent, idolized leadership, and discouraged even basic questions. The fraud was massive, yes, but what enabled it was a company-wide code of silence.

That same culture exists in many family-run businesses and small organizations. No, you’re probably not using shell companies to inflate revenue. But if your employees are afraid to question bad practices—or don’t even know they can—you’re opening the door to serious trouble.

The Enron Culture Problem

Enron was filled with smart people. But those smart people were encouraged to fall in line. Questioning management decisions was seen as disloyal. Internal auditors were ignored. Whistleblowers were dismissed. In the end, $74 billion in shareholder value evaporated almost overnight.

What caused that? A toxic culture of fear and false loyalty.

How Culture Enables Fraud

Fraud doesn’t thrive in environments where people speak up. It thrives where employees:

• Don’t know how or where to report issues
• Feel like raising concerns will get them fired
• Assume someone else is responsible for catching problems
• Trust that ‘the boss knows what they’re doing’—even when something feels off

That’s how fraud festers in the shadows.

Family Businesses Are Not Immune

In small businesses, staff often wear multiple hats and answer directly to ownership. That’s fine—until it creates a dynamic where nobody feels comfortable questioning the person who signs their paycheck. And in many cases, family members are the ones running the books, managing payroll, or approving big expenses. If something looks wrong, who’s going to speak up?

You need to make sure the answer isn’t: no one.

How to Create a Speak-Up Culture

• Set the tone at the top: Make it clear that ethics and integrity are non-negotiable
• Provide clear channels for reporting concerns—anonymous if possible
• Train staff on common fraud red flags (see our cheat sheet)
• Celebrate good catches instead of punishing questions
• Use outside partners (like your MSP or bookkeeper) to review areas too close to home

Final Thoughts

Enron didn’t fail because no one saw the fraud—it failed because no one felt safe enough to stop it.

Don’t wait for disaster. Build a culture where doing the right thing is expected, not risky.

Start today by training your team to spot the signs of fraud and giving them the tools to speak up.