Enron
The Enron
Kaiwing Ho
Ethics, Governance & Accountability
BU.135.301.U2.FA12
Professor Crain
November 21, 2012
Enron
Since Enron Corporation has been bankrupt there were 20,000 employees lost their jobs, medical insurance and average severance pay was only $4500. However, the top executives were paid bonuses totaling $55 million. In 2001, employees lost $1.2 billion in retirement funds and retirees lost $2 billion in pension funds. Yet, Enron’s top executives cashed in $116 million in stock. In Titanic, the captain went down with the ship but in Enron the captain first gave himself and his friends some bonus and live boats and higher up and told employee and stockholders everything is fine. (Gibney, 2005) How is it that ethic for the executives in Enron earn that much of profits while the stakeholders have to suffer from their unethical decisions?
Enron: The Smartest Guys in the Room is talking about the downfall of Enron Corporation that brings up the securities law, Sarbanes-Oxley Act, in order to regulate the wrongful acts of executives of those big corporations. Kenneth Lay formed Enron Corporation in 1985 in Texas Huston. Originally, the company initially engaged in a U.S. nationwide distribution of electricity, natural gas, and the construction of power plants in the world, laying of pipelines and other infrastructure. However, Lay was not satisfied so he hired Jeffery Skilling. Skilling came out with a better way to deliver energy rather than be bond by the pipelines Enron can actually become a ‘stock market’ for natural gas. He transferred energy into financial instrument that can be traded as stocks and bonds. This idea was appreciated as a new business market and named ‘America's most innovative company’ for six consecutive years. Yet, the news that leaded Enron Corporation fame in the world was the bankrupt in a few weeks after Skilling resigned the CEO of the company and institutionalized systematic financial fraud scandal. The only
Kaiwing Ho
Ethics, Governance & Accountability
BU.135.301.U2.FA12
Professor Crain
November 21, 2012
Enron
Since Enron Corporation has been bankrupt there were 20,000 employees lost their jobs, medical insurance and average severance pay was only $4500. However, the top executives were paid bonuses totaling $55 million. In 2001, employees lost $1.2 billion in retirement funds and retirees lost $2 billion in pension funds. Yet, Enron’s top executives cashed in $116 million in stock. In Titanic, the captain went down with the ship but in Enron the captain first gave himself and his friends some bonus and live boats and higher up and told employee and stockholders everything is fine. (Gibney, 2005) How is it that ethic for the executives in Enron earn that much of profits while the stakeholders have to suffer from their unethical decisions?
Enron: The Smartest Guys in the Room is talking about the downfall of Enron Corporation that brings up the securities law, Sarbanes-Oxley Act, in order to regulate the wrongful acts of executives of those big corporations. Kenneth Lay formed Enron Corporation in 1985 in Texas Huston. Originally, the company initially engaged in a U.S. nationwide distribution of electricity, natural gas, and the construction of power plants in the world, laying of pipelines and other infrastructure. However, Lay was not satisfied so he hired Jeffery Skilling. Skilling came out with a better way to deliver energy rather than be bond by the pipelines Enron can actually become a ‘stock market’ for natural gas. He transferred energy into financial instrument that can be traded as stocks and bonds. This idea was appreciated as a new business market and named ‘America's most innovative company’ for six consecutive years. Yet, the news that leaded Enron Corporation fame in the world was the bankrupt in a few weeks after Skilling resigned the CEO of the company and institutionalized systematic financial fraud scandal. The only