In April 2008, Dr. Tompkins was asked to serve as a Corporate Governance expert witness in Case No: H 06-CV-3905 in the United States District Court of Texas. In this case, Enron, the plaintiff, was suing three insurance companies, The Great American Insurance Company, Federal Insurance, and St. Paul Fire & Marine Insurance Company, to make payment on a total of $75 million on a claim under a “Crime Loss Indemnity Policy”. Dr. Tompkins was retained by the attorneys for the three insurance companies to serve as an expert witness to determine if the Board of Directors permitted a “culture” that was conducive to unethical behavior by executive management. As part of this experience, Dr. Tompkins wrote a document filed in court to state his position on the matter and was subject to a seven-hour deposition by Enron’s counsel. He also had to be prepared to testify in court at the trial, but as is typical with the vast majority of these cases, they get settled prior to the trial date.
The Coles College of Business Vision Statement states that we aspire to be the preferred provider of “relevant research and practice valued by the marketplace”. As a teacher who embraces the Socratic method, he is used to many sharp Kennesaw students who ask outstanding questions. There is no doubt that this served as an excellent platform to prepare him for the seven hours of “grilling” that he received by Enron’s counsel. His research training was also invaluable in writing his report for the court in which Dr. Tompkins used procedures to seek relevant information to evaluate the hypothesis in question. Finally, his service as the Director of Board Advisory Services over the years provided him with a passport into boardrooms which enabled him to observe governance practices first-hand. Hence, not only does he have a book knowledge of corporate governance, but he also enjoys a hands-on perspective.
While his teaching, research and service activities at the Coles College resulted in something of value to the marketplace, the converse is also true: this experience has also helped his teaching, research and service. Enron’s relevance in the classroom not only stimulates discussions around ethics, but also ties into the finance-related concepts of “efficient markets”, “risk and return”, and “agency costs. His Enron experience has also spawned research including a co-authorship with one of the defense attoreys in an article titled: “Enron Revisited: Legal and Governance Issues”. Finally, his Enron engagement has opened doors to service opportunities. For example, he recently presented the “21st Century Governance Principles” to the Junior League of Atlanta. He has also been invited to serve on a panel at a forthcoming American Bar Association conference in which the theme will be “Enron Revisited”.
In short, serving as the Enron Corporate Governance expert witness was an activity that was valued by the marketplace because of the relevance of his teaching, research and service; similarly, his teaching, research and service has been enhanced by this experience. This “two-way street” is what exemplifies the Vision, Mission, and Core Values of the Coles College of Business in which we seek to connect theory with practice and strive in our activities to be relevant to the marketplace.
*James Tompkins, Ph.D., is Professor of Finance and the Director of Board Advisory Services for the Corporate Governance Center. He teaches Corporate and International Finance, and consults and conducts research in the Corporate Governance area.
“21st Century Governance and Audit Committee Principles,” (Paul D. Lapides, Dana R. Hermanson, Joseph V. Carcello, Mark S. Beasley, F. Todd DeZoort, Terry L. Neal and James G. Tompkins), published in various press outlets, May 8, 2007 |
