By: John T. Slania

May 15, 2006, Crain's Chicago Business

On his first day on the witness stand, former Chairman Kenneth Lay told the jury that he took full responsibility for everything that happened at Enron Corp.

"Having said that, I can't accept responsibility for illegal acts I had no knowledge of,'' he added.

A week before, his co-defendant, Jeffrey Skilling, professed much the same.

Whether the jury will agree with them remains to be seen. But Crain's asked local business and law experts to weigh in on the "Super Bowl of Business Trials''-a case that has left its mark on all public companies.

Subtle crimes

David Messick, professor of ethics, Northwestern University's Kellogg School of Management

Will Jeffrey Skilling be convicted?

It's going to be tough. Skilling is accused of crimes that are more subtle than outright fraud. It's about what he knew or didn't know.

Will Kenneth Lay be convicted?

It's going to be even harder.

What are your impressions of the trial so far?

The prosecution has been very effective in trying to convince the jury that these guys were arrogant, that they weren't interested in hearing contradictory opinions.

How would a conviction affect the conduct of public companies and their top executives?

My hope is that this will discredit incompetence as a defense against corporate crimes, but I have no confidence that that will happen. These guys were responsible for the collapse of a multibillion-dollar corporation, and instead of saying, "Jesus, I'm sorry, I screwed up,'' they're saying, "It's not my fault.''

A bruised nation

Laura Hartman, professor of business ethics, DePaul University

Will Jeffrey Skilling be convicted?

There are reasons why both Jeffrey Skilling and Kenneth Lay will be found guilty.

Why?

We as a nation are bruised by what happened with Enron. Both men were in positions of enormous responsibility and should be held accountable.

What are your impressions of the trial so far?

The most powerful message from the prosecution is the tremendous human loss: the lives that have been ruined and the lost pensions, jobs and security. But just as surprising is the way the defense has been able to create human beings out of the defendants. If the defense can paint a picture that this was an enormous organization and these were just regular human beings and not omniscient gods, the jury might be persuaded.

'Ah shucks' defense

Kathryn Kennedy, associate professor of employee benefits, John Marshall Law School

Will Jeffrey Skilling be convicted?

I hope so. There's enough evidence that he knew what his subordinates were doing.

Will Kenneth Lay be convicted?

He's taken a folksy, "Ah shucks, I wouldn't do anything to hurt you'' approach. To me, he's guilty if he did know and tried to make it look like he didn't. And he's guilty if he didn't know, because he should have.

What are your impressions of the trial so far?

I'm amazed at how quickly it's moving along compared to the George Ryan trial. The prosecution has been very aggressive.

How would a conviction affect the conduct of public companies and their CEOs?

Executives would no longer be able to use the excuse that they didn't know what was going on.

'Huge wake-up call'

Steven Kaplan, professor of entrepreneurship and finance, University of Chicago Graduate School of Business

Will Jeffrey Skilling be convicted?

Yes. He was CEO. It's not credible for him to say he did not know what was going on. The jury will conclude he was not honest, that he was guilty of making willful and false statements.

Will Kenneth Lay be convicted?

I don't know. Lay can say he was not in charge, that he didn't know what was going on. It could be true.

How would a conviction affect the conduct of public companies and their top executives?

With Enron, WorldCom, HealthSouth and Tyco, the fact that these perpetrators ruined so many people's lives is a huge wake-up call. Whether or not Skilling and Lay are convicted, CEOs are going to be careful not to commit fraud. They see there's a good chance they're going to get caught and pay a penalty.