Corporate Governance

Good Essays
Topics: Enron, Enron scandal
Corporate Governance Issue
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Corporate Governance Issue
Introduction
The Purpose of the Case study is to assess the case of Enron mainly at the Corporate Governance problems. This Report will point out that why Independence of the Company’s Director is vital to clear operation of the organization; why successful Boards are compulsory for the companies to avoid the disasters like the Enron; and there must be the Working committee including the Non-Executive directors.
Discussion
The Enron Corporation was the American Commodities, energy & the company services based in the Texas. Before the Bankruptcy on 2nd December, year 2001, Enron has employed around 20 Thousand staff & was one of World 's main Natural gas, Electricity, Communications & the pulp & paper companies by claimed Turnover of around $ 100 Billion in the year 2000.
Enron had used the deceptive & false methods to resourcefully hide their dealings that causes to the investors losses & the trust of creditors. The Losses were also held off book by the subsidiary entities while the Assets were commenced. The Publicly listed entities are needed to make their financial statements on the public but the finances of Enron’s were an impassable maze of cautiously crafted fantasy Transactions among themselves and their Subsidiaries (Peng, 2002). The Insider Trading will happen when the person will use Confidential that is the Insider Information regarding the Company to purchase or sell entities share for the Gain. What Proof might we find in case of the Insider Trading?
The Past Head of the Enron and the New Enron Executives were manipulating entities Finance & sold the company shares at the inflated price and had got around $4.25 Million in the Income from 2000 till 2001. Enron has also filed for the protection of Bankruptcy in Southern region of New York at the late 2000 & had chosen Gotshal, Weil and Manges as the Bankruptcy was direction. This



References: Bryce, R. (2002) Pipe Dreams: Greed, Ego, and the death of Enron. Oxford: Public Affairs. Healy, Paul M Alex G. (2005). Enron: The smartest guys in the room. Documentary, Magnolia Pictures. Yunxuan & Peng Z. (2002). The Analysis on Affecting a Radical Cure Accounting Fraud by the Corporations Which Have Come into the Market from Enron Company Bankruptcy. Economy & Audit study, 17(4):32-35. Larry Rittenberg, Mark A. (2001). Internalization versus externalization of the internal audit function: an examination of professional and organizational imperatives. Accounting, Organizations and Society, 26: 617-641. Gillan SL, & Martin JD. (2007). Corporate governance post-Enron: Effective reforms, or closing the stable door?. Journal of Corporate Finance, 13(5): 929-958 Xuefei H Matthias K, (2009), Creative Accounting, the Enron Case and Its Impact on Corporate Governance, Published by GRIN Verlag Vicki P, (2007), Why the case of Enron falls into the Principal Agent framework, Published by GRIN Verlag, Peng Z. (2002). The Analysis on Effecting a Radical Cure Accounting Fraud by the Corporations Which Have Come into the Market from Enron Company Bankruptcy. Economy & Audit study, 17(4):32-35.

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