corporate governance enron case study

• Contributors

Twenty Years Later: The Lasting Lessons of Enron

Michael Peregrine  is partner at McDermott Will & Emery LLP, and  Charles Elson  is professor of corporate governance at the University of Delaware Alfred Lerner College of Business and Economics.

This spring marks the 20th anniversary of the beginning of the dramatic and cataclysmic demise of Enron Corp. A scandal of exceptional scope and impact, it was (at the time) the largest bankruptcy in American history. The alleged business practices of its executives led to numerous individual criminal convictions. It was also a principal impetus for the enactment of the Sarbanes-Oxley Act and the evolution of the concept of corporate responsibility. As such, it is one of the most consequential corporate governance developments in history.

Yet a new generation of corporate leaders has assumed their positions since then; for others, their recollection of the colossal scandal may have faded with the years. And a general awareness of corporate responsibility principles is no substitute for familiarity with the governance failings that reenergized, in a lasting manner, the focus on effective and responsible governance. A basic appreciation of the Enron debacle and its governance implications is essential to director engagement.

Enron was formed as a natural gas pipeline company and ultimately transformed itself, through diversification, into a trading enterprise engaged in various forms of highly complex transactions. Among these were a series of unconventional and complicated related-party transactions (remember the strangely named Raptor, Jedi and Chewco ventures) in which members of Enron’s financial leadership held lucrative financial interests. Notably, the management team was experienced, and both its board and its audit committee were composed of a diverse group of seasoned, skilled, and prominent individuals.

The company’s rapid financial growth crested in March 2001, with media reports questioning how it could maintain its high stock value (trading at 55 times its earnings). Famous among these was the Fortune article by Bethany McLean, and its identification of potential financial reporting problems at Enron. [1] In a dizzying series of events over the next few months, the company’s stock price collapsed, its CEO resigned, a bailout merger failed, its credit was downgraded, the SEC began an investigation of its dealings with related parties, and it ultimately declared bankruptcy. Multiple regulatory investigations followed, several criminal convictions were obtained and Sarbanes-Oxley was ultimately enacted to curb the perceived abuses arising from Enron and several similar accounting scandals. [2]

There remain multiple important, stand-alone governance lessons from Enron controversy of which all directors would benefit:

1. The Smartest Guys in the Room . The type of aggressive executive conduct that contributed heavily to the fall of Enron was not unique to the company, the industry or the times. In the absence of an embedded culture of corporate ethics and compliance, there is always the potential for some executives to pursue “edge of the envelope” business practices, especially when those practices produce meaningful near term financial or other operational results. That attitude, combined with weak board oversight practices, can be a disastrous combination for a company.

Even though commerce has made great progress since then on internal controls, corporate responsibility ultimately depends upon the integrity of management, and the skill and persistence of board oversight. [3]

2. The Critical Importance of Board Oversight . As the company began to implode, Enron’s board commissioned a special committee to investigate the implicated transactions, directed by William C. Powers Jr., then dean of the University of Texas School of Law. The Powers Report, as it came to be known, outlined in staggering detail a litany of board oversight failures that contributed to the company’s collapse. [4]

These included inadequate and poorly implemented internal controls; the failure to exercise sufficient vigilance; an additional failure to respond adequately when issues arose that required a prompt and serious response; cursory review of critical matters by the audit and compliance committee; the failure to insist on a proper information flow; and an inability to fully appreciate the significance of some of the information with which the board was provided. [5]

3. Spotting Red Flags . Amongst the most damaging of the governance breakdowns was the failure to question the legitimacy of the related-party transactions for which so many internal controls were required. These deficiencies served to bring a once significant company and its officers to their collective knees and offer many lasting governance lessons. As the Powers Report concluded with brutal clarity, a major portion of the company’s business plan—related-party transactions—was flawed. [6]

These transactions were replete with risky conflicts of interest involving management. There was a significant “forest for the trees” concern—an inability to recognize that conflicts of such magnitude that required so many board-approved internal controls and procedures should never have been authorized in the first place. All this, despite the fact that the individual Enron directors were people of accomplishment and capability who had been recognized by the media as a well-functioning board. [7]

Yet, they lacked the actual necessary independence to recognize the red flags waving before them. Their varied relationships with company leadership made them all-too-comfortable with what they were being told about the company. [8] This connection made it difficult for them to recognize the dangers associated with the warning signals that the conflicted transactions projected. Indeed it was the revelation of these conflicts that attracted media attention and ultimately “brought the house down”. [9]

4. It Can Still Happen . The 2020 scandal encompassing the German financial services company Wirecard offers one of the latest high profile (international) examples of how alleged aggressive business practices, lax internal and auditor oversight, accounting irregularities and limited regulatory supervision can combine into a spectacular corporate collapse that prompted numerous government fraud investigations. It is for no small reason that the Wirecard scandal is referred to as the “German Enron”. [10]

5. A Significant Legacy . Yet the Enron controversy remains fundamentally relevant as the spark behind the corporate responsibility environment that has reshaped attitudes about corporate governance for the last 20 years. It’s where it all began—the seismic recalibration of corporate direction from the executive suite back to the boardroom, where it belongs. It birthed the fiduciary guidelines, principles, and “best practices” that serve as the corridors of modern corporate governance, developed in direct response to the types of conduct so criticized in the Powers Report. [11]

And that’s important for today’s board members to know. [12] Because over the years, the message may have lost its sizzle. The once-key oversight themes incorporated within “plain old” corporate responsibility seem to be yielding the boardroom field to the more politically popular themes of corporate social responsibility. And, while still important, corporate compliance seems to have had its “fifteen years of fame” in the minds of some executives; the organizational initiative has turned elsewhere.

But the pendulum may be swinging back. There is a renewed recognition that compliance programs can atrophy from lack of support. The new regulatory administration in Washington may return to an emphasis on organizational accountability. As Delaware decisions suggest, shareholders may be growing increasingly intolerant of costly corporate compliance and accounting lapses. And there’s a renewed emphasis on the role of the whistleblower, and the board’s role in assuring the support and protection of that role.

So it may be useful on this auspicious anniversary to engage the board on the Enron experience, in a couple of different ways. First, include an overview as part of formal director “onboarding” efforts. Second, have a board level conversation about expectations of oversight, and spotting operational and ethical warning signs. And third, reconsider the Enron board’s critical and self-admitted failures, in the context of today’s boardroom culture. [13]

Such a conversation would be a powerful demonstration of a board’s good-faith commitment to effective governance, corporate responsibility and leadership ethics.

1 Bethany McLean, “Is Enron Overpriced?” Fortune, March 5. 2001. https://archive.fortune.com/magazines/fortune/fortune_archive/2001/03/05/297833/index.htm. (go back)

2 See , Michael W. Peregrine, Corporate BoardMember , Second Quarter 2016 (henceforth “Corporate BoardMember”). (go back)

3 See , e.g., Elson and Gyves, In Re Caremark : Good Intentions, Unintended Consequences, 39 Wake Forest Law Review, 691 (2004). (go back)

4 Report of the Special Investigation Committee of the Board of Directors of Enron Corporation, February 1, 2002. http://i.cnn.net/cnn/2002/LAW/02/02/enron.report/powers.report.pdf. (go back)

5 See , Michael W. Peregrine, “The Corporate Governance Legacy of the Powers Report” Corporate Counsel , January 23, 2012 Monday. (go back)

6 See , Michael W. Peregrine, “Enron Still Matters, 15 Years After Its Collapse”, The New York Times , December 1, 2016. (go back)

7 F.N. 5, supra . (go back)

8 See , Elson and Gyves, “The Enron Failure and Corporate Governance Reform”, 38 Wake Forest Law Review 855 (2003) and Elson, “Enron and the Necessity of the Objective Proximate Monitor”, 89 Cornell Law Review 496 (2004). (go back)

9 John Emshwiller and Rebecca Smith, “Enron Posts Surprise 3rd-Quarter Loss After Investment, Asset Write-Downs”, The Wall Street Journal , October 17, 2001. https://www.wsj.com/articles/SB1003237924744857040. (go back)

10 Dylan Tokar and Paul J. Davies, “Wirecard Red Flags Should Have Prompted Earlier Response, Former Executive Says” The Wall Street Journal , February 8, 2021. https://www.wsj.com/articles/wirecard-red-flags-should-have-prompted-earlier-response-former-execu tive-says-11612780200. (go back)

11 Corporate BoardMember , supra . (go back)

12 See Peregrine, “Why Enron Remains Relevant”, Harvard Law School Forum on Corporate Governance, December 2, 2016. (go back)

13 Corporate BoardMember , supra. (go back)

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What Led to Enron, WorldCom and the Like?

Increases in executive compensation, jumps in incentives to manage earnings, and shifts in auditing firm structure contributed to governance failures.

October 15, 2003

Increases in executive compensation and stock options, jumps in incentives to manage earnings, and major shifts in the structure of auditing firms are just a few of the changes that led to loss of money and public confidence in corporations during the past decade, Stanford GSB Professor Maureen McNichols told an alumni audience.

McNichols, who is the Marriner S. Eccles Professor of Public and Private Management at the business school, directs the Corporate Governance Executive Program for directors of public corporations.

Oversight mechanisms already in place failed to prevent recent scandals involving the likes of WorldCom, Waste Management, Sunbeam, and, of course, Enron, she said, asking rhetorically: “If the system is not, in fact working, what are its weaknesses?”

The crises in corporate governance are not new she said and proceeded to play a “Name That Governance Scandal!” guessing game with the audience. What publicly traded construction management company had directors who were also secretly the owners of another company that did the actual construction work — and fraudulently collected all profits? When the scheme was discovered, the directors transferred shares of stock to members of Congress in a failed attempt to forestall investigation. The company in question? The Boston Pacific Railroad — in 1872. “Bad behavior is not new,” said McNichols. “There have been scoundrels and rogues throughout history.”

The same is true in executive compensation, she said. Eugene Grace, president of Bethlehem Steel in 1929, earned a 1.6 million cash bonus on a salary of just $12,000. “This would be equivalent to a bonus of over a billion dollars on a million-dollar salary today,” said McNichols.

An unexpected resource for the October 18 Alumni Weekend talk was Robert “Steve” Miller, MBA ‘68, who was sitting in the front row. A renowned turnaround expert who has been brought into companies facing financial crisis like Chrysler, Waste Management, and — most recently as CEO of Bethlehem Steel, Miller, added ruefully: “I guessed I missed the boat.”

Trends in Governance Failures in the 1990s

Although bad behavior is not new, McNichols said, the world changed in the 1990s. The corporate governance failures seen in the 1990s reflect significant changes in the incentives of managers. For starters, there were dramatic changes in CEO compensation. Between 1990 and 2001, worker pay increased 42 percent; corporate profits increased 88 percent; the Standard & Poor 500 index increased 248 percent; and CEO pay rose a whopping 463 percent.

At the same time, the number of earnings restatements, a serious step taken to correct inconsistencies, also increased dramatically. In 1997, 116 firms restated their earnings; by 2001, that number had more than doubled, to 270. What these metrics reflect is “management’s growing incentive, willingness, and ability to manipulate earnings,” said McNichols.

But management greed wasn’t the only driving factor. In the 1990s, auditing firms became “client-focused,” a euphemism for increased attempts to sell clients a significant bundle of non-auditing services. This provided a clear conflict of interest to the auditing firms that now had incentives to look out for clients’ interests while still shouldering primary responsibility to look out for stockholders. Participants viewed a short film clip on the fraud at Waste Management and saw Roderick Hills, former Securities Exchange Commission Chairman note that in the nine cases where he had served on a board that replaced the CEO, the auditors later provided information they had not made available to the board when the former CEO was in place. Steve Miller added his eyewitness account, describing his and Roderick Hills’ role in responding to the governance failures at Waste Management. “Can you just travel around with me as I give this lecture?” joked McNichols.

Add a record number of new offerings to capital markets, “and we saw that governance structures were not adequate to meet all these increased pressures,” said McNichols. A report by former SEC chairman Richard Breeden made not one or two but 78 different recommendations to change corporate governance at WorldCom.

Discretion As the Better Part of Accounting

Arising out of the governance mayhem of the past decade are key lessons for regulators, auditors, investors, analysts, managers, and directors, McNichols said. Due to the large and complex nature of the checks and balances of an evolving system, it is imperative that each member of the governance system understands how the role he play fits into the big picture.

For regulators, there is the sobering fact that redundancy in governance systems do not preclude failures and that the oversight processes and self-regulation of auditors, analysts, and boards of directors are “only as strong as the weakest links.” The focus of the Sarbanes-Oxley Act of 2002 on financial statements and auditors and strengthening the role of the audit committee is a move in the right direction, she said.

The key lesson for auditing firms is to provide auditors with incentives to convey all relevant information to the board of directors or audit committee. Regulators will respond to audit failures and obstruction of justice with very significant penalties.

She argued that for analysts to generate truly independent research, they must be rewarded for the quality of the research they provide, and they must examine the quality of corporate earnings and financial statements diligently.

Corporate managers, for their part, must understand that distorting financial statements imposes huge costs on the rest of the economy. Furthermore, she said, financial statements that provide a misleadingly-glowing view of future growth may provide incentives for the company itself to act inappropriately by making excessive capital investments, as the telecom bubble illustrates.

Managers, instead, need to understand that they are best serving investors by presenting credible financial statements — and that firms with better reporting will be valued more highly by investors. Not insignificantly, managers must also take to heart that “misleading investors can lead to civil and criminal prosecution,” said McNichols.

She argued it is neither possible nor desirable to turn preparation of financial statements into a mechanical process. Indeed, the level of discretion and judgment required to prepare financial statements that represent the economic state of the organization fairly and transparently will increase, not decrease, in coming years.

Finally, McNichols outlined a number of critical lessons for directors. First, the oversight role of directors has increased substantially, though the advisory role is no less important. Secondly, the legal standard for a director is to demonstrate good faith judgment, and this requires that decisions are arrived at through a sound process. A critical aspect of a good process is ensuring that directors receive all relevant information.

McNichols recommended the “TV test” described by faculty colleague Bill Miller, who attributes it to the Business School’s Dean Emeritus Arjay Miller. His test for good decision-making was whether he would feel comfortable explaining the board’s decision on the evening news. “If you’re not comfortable with that, you probably need to go back and examine your process for arriving at judgments,” said McNichols.

For media inquiries, visit the Newsroom .

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The Fall of Enron

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• | Language: English
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Paul M. Healy

Krishna G. Palepu

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The Fall of Enron (TN)

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• The Fall of Enron  By: Paul Healy and Krishna Palepu

Lessons from the Enron Scandal

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Kirk Hanson, executive director of the Markkula Center for Applied Ethics, was interviewed about Enron by Atsushi Nakayama, a reporter for the Japanese newspaper Nikkei.

On March 5, 2002, Kirk Hanson, executive director of the Markkula Center for Applied Ethics, was interviewed about Enron by Atsushi Nakayama, a reporter for the Japanese newspaper Nikkei . Their Q & A appears below:

Nakayama: What do you think are the most important lessons to be learned from the Enron scandal?

Hanson: The Enron scandal is the most significant corporate collapse in the United States since the failure of many savings and loan banks during the 1980s. This scandal demonstrates the need for significant reforms in accounting and corporate governance in the United States, as well as for a close look at the ethical quality of the culture of business generally and of business corporations in the United States.

N: Why did this happen?

H: There are many causes of the Enron collapse. Among them are the conflict of interest between the two roles played by Arthur Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the health of the company and its business operations. In some ways, the culture of Enron was the primary cause of the collapse. The senior executives believed Enron had to be the best at everything it did and that they had to protect their reputations and their compensation as the most successful executives in the U.S. When some of their business and trading ventures began to perform poorly, they tried to cover up their own failures.

N: Why didn't the company's directors protect the employees and investors?

H: The board of directors was not attentive to the nature of the off-books entities created by Enron, nor to their own obligations to monitor those entities once they were approved. The board did not pay attention to the employees because most directors in the United States do not consider this their responsibility. They consider themselves representatives of the shareholders only, and not of the employees. However, in this case they did not even represent the shareholders well-and particularly not the employees who were shareholders.

N: Why didn't anyone stop Skilling, Lay and Fastow?

H: Jeffrey Skilling and Andrew Fastow changed the business strategy and corporate culture of Enron. In the process, they appeared to make Enron very innovative and very profitable. When the stock is rising and the shareholders are getting rich, there is little incentive for the board of directors and the investment community to question the executives very closely. The board is at fault for permitting the suspension of Enron's own code of conduct to permit the conflicts of interest inherent in the off-books corporations controlled by Fastow. A few analysts recommended their clients stay out of Enron, but not many.

N: Could you tell me how the corporate governance should be changed?

H: I do not think the rules of corporate governance will be changed in significant ways. But boards of directors need to pay closer attention to the behavior of management and the way the company is making money. In too many American companies, board members are expected to approve what management proposes-or to resign. It must become acceptable and mandatory to question management closely. There is little chance the U.S. governance rules will be changed to make boards responsible to the employees as well as to the shareholders. However, board members would be foolish not to pay more attention to how employees and customers and business partners are treated. These greatly affect the long-term value of the shareholders' investment.

N: Don't you think this scandal damaged the new economy's fundamental system?

H: Enron is a prominent example of a "new economy" company. Kenneth Lay and Jeffrey Skilling claimed that Enron was the most innovative company in the United States and at times tried to intimidate reporters or analysts who questioned their strategy. In the new economy, new kinds of companies have been created. Enron's collapse will encourage investors, analysts, reporters, and employees to ask "old economy" questions about these new economy companies: How does this company make money? Can it sustain this strategy over the long term? How do those who work in and with this company feel about it? The new economy has lost some of its appeal after the collapse of many dot.com companies and of Enron.

N: Can we believe analysts' strong "buy" recommendations from now on?

H: Many have questioned the overly optimistic "buy" recommendations analysts have issued in recent years, fearing they had conflicts of interest because of the underwriting business their firms did for dot.coms or because of the investment industry culture which rewarded analysts who were bullish on the new economy. I think there will be much closer scrutiny of analysts' recommendations in the months and years ahead, and a close look at the conflicts of interest of individual analysts. Analysts who are always bullish will be less likely to be believed.

N: What reforms should Congress, the SEC, and others institute post-Enron?

H: I believe accounting regulations should be altered to prohibit ownership of both auditing and consulting services by the same accounting firm. Accounting firms are already moving to sever their consulting businesses. The SEC should probably adopt additional disclosure requirements. Various regulators should tighten requirements for directors to be vigilant and provide protections for whistleblowers who bring improper behavior to public attention. But, in the final analysis, the solution to an Enron-type scandal lies in the attentiveness of directors and in the truthfulness and integrity of executives. Clever individuals will always find ways to conceal information or to engage in fraud.

N: How can credibility be recovered with investors?

H: U.S. firms and foreign firms listed on U.S. stock exchanges will need to demonstrate that they have eliminated all off-books accounts which distort the public's understanding of the financial health of the organization. They may need to pledge that they will not suspend the company's code of conduct, or at least report to the public when they do. Finally, every company will need to demonstrate that its board of directors is vigorous, vigilant, and that its procedures will enable it to uncover any questionable behavior. Companies may need to adopt a set of "governance best practices" to regain the trust of the market.

N: Some say Enron's collapse was caused by its stock options system. Do you think the executive compensation system should be reformed, and if so, how?

H: The stock option system is not itself the problem. Excessive stock options and excessive corporate compensation give corporate executives too many incentives to manipulate the financial accounts and the stock price of the company. When huge cash or options bonuses are dependent upon achievement of one or a few narrowly defined profit or growth goals, the temptation to manipulate the numbers to get the rewards will be too great. The problem is not the stock option system but the excessive compensation given to executives in the United States, particularly compared to the salaries of regular employees of the company. U.S. companies should look more like Japanese companies in the ratio of the salaries of top executives to those of regular employees.

N: Will stock prices continue to be down because the investors' faith has been shaken? The other day the blue chips like GE and IBM had to reassure investors about the strength of their financial controls.

H: I believe the stock prices of new economy companies will continue to show an "Enron effect" for many months to come. Until an individual company convinces the market that it has rid itself of any questionable practices and has improved its governance systems, it will not be evaluated fully.

N: Don't you think this kind of scandal will be a bad influence on the U.S. economy, which is recovering from recession?

H: Enron has clearly done some damage to the U.S. economy, but it will not hold up recovery from the current recession. The fundamental health of the U.S. economy is strong and now getting stronger. Some individual new economy companies will have depressed stock prices for some time, but they, too, will recover as they demonstrate that they are prepared to prevent Enron-like behavior.

N: You mentioned in Newsweek magazine that Enron will become the morality play of the new economy. Could you give me a more concrete idea what you mean by this?

H: I do believe Enron will be the morality play of the new economy. It will teach executives and the American public the most important ethics lessons of this decade. Among these lessons are:

You make money in the new economy in the same ways you make money in the old economy - by providing goods or services that have real value.

Financial cleverness is no substitute for a good corporate strategy.

The arrogance of corporate executives who claim they are the best and the brightest, "the most innovative," and who present themselves as superstars should be a "red flag" for investors, directors and the public.

Executives who are paid too much can think they are above the rules and can be tempted to cut ethical corners to retain their wealth and perquisites.

Government regulations and rules need to be updated for the new economy, not relaxed and eliminated.

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Corporate Governance

ISSN : 1472-0701

Article publication date: 1 December 2002

The failure of the Enron Corporation in late 2001, apart from signalling the largest corporate bankruptcy in the USA, has also thrown up a myriad of questions about the effectiveness of contemporary accounting, auditing and corporate governance practices. There are strong historical antecedents for distrust of the corporation, latterly represented in extreme form by the anti‐capitalists. The causes of the Enron failure and the immediate response in the USA are outlined. This is followed by the response in the UK among the accountancy bodies, and the results of a comprehensive survey to assess the impact of Enron. This then leads to a comprehensive series of lessons to be learnt in the form of recommendations under the headings of serving the public interest, accounting and financial reporting, auditing, corporate governance, and education.

• Corporate governance
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Vinten, G. (2002), "The corporate governance lessons of Enron", Corporate Governance , Vol. 2 No. 4, pp. 4-9. https://doi.org/10.1108/14720700210447632

Copyright © 2002, MCB UP Limited

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Profile of Enron: The Rise and Fall

By: Scott A. Moore

In 1999, Enron was the #1 company in innovation and quality of management. Less than two years later, it filed for bankruptcy in one of the most portent fraud cases of the decade. The story of…

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• Publication Date: Mar 17, 2010
• Discipline: Business Ethics
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In 1999, Enron was the #1 company in innovation and quality of management. Less than two years later, it filed for bankruptcy in one of the most portent fraud cases of the decade. The story of Enron's rise and fall tells a lot about manipulation of accounting and regulatory standards and about the disregard of ethics and law in pursuit of money and excellence. Against the backdrop of the company's history and main players, the case explains the law-bending tactics used by Enron's management and partners, eventually leading to speculations and the resignation of then-CEO Jeff Skilling. The stock price crash and resulting bankruptcy are also discussed, and the profile ends with the main findings of the ensuing SEC investigation. This case is included in Module 3 of the course Business Thought & Action.

Learning Objectives

After discussing this case study, students will be able to:

1.) Describe the corporate history of Enron from its founding until its bankruptcy.

2.) Assess how the company's corporate governance model contributed to the company's eventual failure.

Mar 17, 2010

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Business Ethics

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United States

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Energy and natural resources sector

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W90C58-PDF-ENG

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Enron and World Finance

A Case Study in Ethics

• © 2006
• Paul H. Dembinski (Professor) 0 ,
• Carole Lager (PhD in Political Science) 1 ,
• Andrew Cornford (Research Fellow) 2 ,
• Jean-Michel Bonvin (PhD in Sociology, Professor) 3

University of Fribourg, Switzerland

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University of Geneva, Switzerland

Financial markets center, switzerland.

University Paris IV-Sorbonne, Switzerland Department of Sociology, University of Geneva, Switzerland

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Table of contents (16 chapters)

Front matter, overview of the book.

Andrew Cornford

Enron: Origins, Character and Failure

Enron and internationally agreed principles for corporate governance and the financial sector, a revisionist view of enron and the sudden death of ‘may’.

• Frank Partnoy

Who Is Who in the World of Financial ‘Swaps’ and Special Purpose Entities

• François-Marie Monnet

Ethics in Thought and Action

An ethical diagnosis of the enron affair.

• Etienne Perrot

Anonymity: Is a Norm as Good as a Name?

• Edward Dommen

Spaces for Business Ethics

• Domingo Sugranyes Bickel

Corporate Governance and Auditing

The demise of andersen: a consequence of corporate governance failure in the context of major changes in the accounting profession and the audit market.

• Catherine Sauviat

Enron et al. and Implications for the Auditing Profession

• Anthony Travis

Enron Revisited: What Is a Board Member to Do?

• Beth Krasna

How to Restore Trust in Financial Markets?

• Hans J. Blommestein

Corporate Culture and Ethics

Enron: the collapse of corporate culture.

• John Dobson

Ethics, Courage and Discipline: The Lessons of Enron

• Robert C. Kennedy

Developing Leadership and Responsibility: No Alternative for Business Schools

• Henri-Claude de Bettignies

Ethics for a Post-Enron America

• John R. Boatright

About this book

'The essays in this book greatly enhance our understanding of the causes of one of the most important events in financial history. The authors examine in notable depth the ethical and governance dimensions of the Enron saga, while providing a fascinating commentary on the nature of modern finance capitalism.' - John Plender, Financial Times and author of Going off the Rail - Global Capital and the Crisis of Legitimacy

'Enron and World Finance addresses the most important issue of our time...This brilliant collection of essays with its remarkably insightful introduction and conclusion require us to consider what might be called the tyranny of economics...Enron is important not only in itself but also as a warning signal of the predictable destructive consequences of the failure of language.' - Robert A. G. Monks, Lens Governance Advisors, USA

'Enron offers an 'ideal' example of using or perhaps misusing financial innovations within modern corporations. The book Enron and World Finance provides a very insightful overview of this memorable case where the ethical dimension of an organization is nonexistent. As professors of Finance, we welcome such a book that illustrates the pitfalls of financial creativity when it ignores or abuses the boundaries of an honest corporate culture and of its management.' - Marc Chesney and Rajna Gibson, Professors of Finance, Swiss Banking Institute, University of Zürich, Switzerland

'The book provides, at once, afresh understanding of the place of ethical thought in financial markets, and a focus on leadership and responsibility for the implementation of ethical duties. I commend this fascinating book to a wide readership in financial and academic institutions.' - Professor Dr. Hans Tietmeyer, Bundesbankprasident i.R., Germany

Editors and Affiliations

Paul H. Dembinski

Carole Lager

University Paris IV-Sorbonne, Switzerland

Jean-Michel Bonvin

Department of Sociology, University of Geneva, Switzerland

About the editors, bibliographic information.

Book Title : Enron and World Finance

Book Subtitle : A Case Study in Ethics

Editors : Paul H. Dembinski, Carole Lager, Andrew Cornford, Jean-Michel Bonvin

DOI : https://doi.org/10.1057/9780230518865

Publisher : Palgrave Macmillan London

eBook Packages : Palgrave Economics & Finance Collection , Economics and Finance (R0)

Copyright Information : Palgrave Macmillan, a division of Macmillan Publishers Limited 2006

Hardcover ISBN : 978-1-4039-4763-5 Published: 16 December 2005

eBook ISBN : 978-0-230-51886-5 Published: 16 December 2005

Edition Number : 1

Number of Pages : XVI, 257

Topics : Accounting/Auditing , Business Strategy/Leadership , Business Ethics , Finance, general

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