Enron Case

Topics: Corporate governance, Enron, Corporation Pages: 3 (1065 words) Published: May 7, 2011
MINI CASE: THE FILURE OF CORPORATE GOVERNANCE AT ENRON 1.Which parts of the corporate governance system, internal and external, do you believe failed Enron the most? In the evaluation of the Enron’s case; by trying to see the very big picture, it is not only about that the internal part of the corporate governance system was failed or but also the external part of the corporate governance system was also failed. As noted on the last paragraph of the mini case, many people from different positions and different companies didn’t act responsibly and according to the generally accepted corporate governance rules. Internally; because of the head executives used the companies resources and the power that their positions provides them for their own interests without thinking on behalf of the stakeholders and shareholders, collapse of Enron’s corporate governance system affected not only Enron’s company but also all the other institutions which integrated to the Enron’s system. Externally, especially legal counsel and auditor company didn’t act ethically. To avoid losing the best and the most powerful customer, they swept all inappropriate practices under the carpet. Therefore we can think that, internal and external part of corporate finance act harmoniously in that case. In the event of the absence of any single actor would result in different consequences or to outbreak of the event much earlier than it did. 2. Describe how you think each of the individual stakeholders and components of the corporate governance system should have either prevented the problems at Enron or acted to resolve the problems before they reached crisis proportions? If we evaluate the Enron Case without going on deeply, we will surprise how such a giant corporation can break down in a very short time process. However, when we evaluate the case deeply, it is understood that the fall of Enron is the last part of a chain reaction which has been already started long time ago. Therefore, before...
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