"The Smartest Guys in the Room" by Bethany McLean and Peter Elkind describes the rise and fall of Enron, a company that started off as a “boring” gas infrastructure company but that quickly rose to prominence by marketing itself as an innovative company that brokered international deals, modernized energy trading and even developed cutting edge broadband technologies. However, a lot of this was a sham fuelled by greed, hubris and propped up by financial wizardry. 

The authors paint a vivid picture of a diverse cast of characters who shaped the Enron saga. At the heart of the narrative are three top executives: Kenneth Lay, the charismatic chairman but disengaged CEO; Jeffrey Skilling, the ambitious president and COO who introduced the aggressive trading and mark to market accounting practices; and Andrew Fastow, the company's CFO who felt underpaid and implemented the dangerous and complex financial schemes that he personally benefited from. 

There’s a whole host of other characters, mostly Enron employees, that are also featured. Across all of them, you get an impression of extreme entitlement and hubris. Enron was focused on “doing deals” and would compensate their employees with a certain percentage of expected profits upon a deal being signed. The result was that a bunch of deals with overly optimistic assumptions were signed, with no one focused on the actual implementation of these deals. As a result Enron turned to a complex financial schemes to raise cash and book profits. Fastow as CFO, felt that he wasn’t being compensated properly because he wasn’t a deal maker and so tried to turn Enron’s finance organization into a “profit centre” by facilitating these complex deals. Eventually Fastow saw the opportunity to start participating and benefiting directly in these deals, crossing the line to outright theft at times. 

It’s amazing how little oversight the board, Lay, Skilling and Arthur Anderson, Enron’s auditor, exercised over these complex and dangerous deals. For the board, it seems like they were just lazy. Lay also seemed pretty lazy, as well as a people pleaser. Skilling was also a people pleaser, and in the end couldn’t handle the stress of being a top executive and resigned just 6 months after being appointed CEO. Arthur Anderson was clearly “captured” by the fat fees they were receiving from Enron. A lot of big banks were also roped into helping Enron with their shady deals by promises and threats about access to future Enron business. 

The board’s and executives lack of interest in all the shady deals is especially aggravating given how well paid they were. Everyone in Enron was super entitled, with Lay’s family using the company’s private jets all the time for personal travel. That alone should have been a firing offense. 

Given how many characters there are, I was glad that I read the “The Smartest Guys in the Room” in physical form so I could easily flip to the cast characters for reference. However, it didn’t contain a lot of information so it was still hard to keep track of everyone. Similarly, I found it hard to follow understand the complex financial deals. An appendix explaining some of them would of been nice. The book is mostly chronological but each chapter focuses on a particular theme so might mention some activities which only covered in depth later. This also make the book a bit hard to follow, those I’m not certain what the alternative would have been. Maybe a timeline in the appendix would have helped also? 

Overall, I really enjoyed this book and recommend it to any who enjoys non-fiction accounts of interesting business shenanigans.