Portland State Magazine Spring 2018

22 AS THE BIGGEST bankruptcy and audit scandal of its time, the failure of the Enron Corporation in the early 2000s grabbed headlines around the world. The unraveling of this Texas-based energy company exposed a tangled web of offshore tax shelters, inflated stock values and questionable accounting practices orchestrated by its executives and board of directors. What could have led to such systematic and widespread fraud in a major American corporation? And what can be done to prevent another Enron-like disaster from happening again in the U.S.? More regulation? Deeper government oversight? Research by two Portland State faculty who study corporate governance suggest there may be a higher-level way to prevent the “groupthink” that may have contributed to Enron’s demise: instituting policies and practices that attract and retain a more diverse set of employees at all levels, from boardroom to factory floor. Jing Zhao and Brian Bolton, who teach and do research in The School of Business at PSU, used big data in separate studies to show that companies that hire a more diverse workforce produce more innovative products and earn higher profits. And for local companies like Daimler Trucks North America, based in Portland, the benefits of a diverse workforce go far beyond the bottom line. Research reveals that companies with a diverse workforce improve their bottom line. WR I T T E N B Y KURT B EDE L L DIVERSITY the power of