Corporate Governance - Satyam & Enron Case Studies

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A PROJECT ON:
CORPORATE GOVERNANCE

Presented by students of Department of Business Studies,
DeenDayal Upadhyaya College,
University of Delhi.

Devesh D Lalwani
10/BBS/0165

Shivam Gupta
10/BBS/0177

Abhinav Goel
10/BBS/0179

Jai Singh Gambhir
10/BBS/0157

Declaration

We student of Bachelor of Business Studies (1st semester), in Deen Dayal Upadhyaya College, University of Delhi, hereby declare that I have made this academic project titled ‘Corporate Governance’ as a part of the internal assessment for the subject ‘Fundamentals of Management’, for academic year 2009-10. The project is submitted for the first time and here only and the information submitted therein is true to the best of my knowledge.

I sincerely thank Ms. Aanchal Gupta and my friends for the help extended by them for the successful completion of the project report.

date : ----

Countersigned Candidate’s signature

(Ms. Aanchal gupta)

Table of contents

S.no| Topic| Page no|
1| Corporate governance| 5-6|
2| Enron – An overview| 7-10|
3| Journey from Enron corporationTo Enron creditors recovery corporation| 10-14| 4| Enron’s injured parties| 14|
5| Lessons to be learnt | 15-16|
6| Satyam – An overview| 17-21|
7| The Satyam Scandal| 21-27|
8| Satyam Scam Parties Responsible| 27-32| 9| Aftermath of the scam| 32-34|
10| People affected from it | 35-37|
| Bibliography | |

CORPORATE GOVERNANCE
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, the board of directors, employees, customers, creditors, suppliers, and the community at large. Corporate governance is a multi-faceted subject. An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focuses on the impact of a corporate governance system in economic efficiency, with a strong emphasis on shareholders' welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world. There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and MCI Inc. (formerly WorldCom). In 2002, the U.S. federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance. Issues of corporate governance have been hotly debated in the United States and Europe over the last decade or two. In India, these issues have come to the fore only in the last couple of years. Naturally, the debate in India has drawn heavily on the British and American literature on corporate governance. There has been a tendency to focus on the same issues and proffer the same solutions. For example, the corporate governance code proposed by the Confederation of Indian Industry (Bajaj, 1997) is modelled on the lines of the Cadbury Committee (Cadbury, 1992) in the United Kingdom. This paper argues however that the crucial issues in Indian corporate governance are very different from those in the US or...
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