How Enron Could Have Been Structured To Avoid the Scandal? Whether Enron’s Officers Acted within the Scope of Their Authority? Describe the Corporate Culture at Enron. Alleged Irregularities In The Actions Between Sellers and Securities of Enron. Whether or Not Enron Was Liable For the Actions of Its Agents and Employees. Enron was one of the best companies in the areas of communication, energy and natural gas. This company had an outstanding performance in terms of profits, but corrupt activities caused this company to lose their success. However, there are different ways that could have been done to avoid these events from happening. First, laws and regulations have allowed providing consulting services to a company and then turning around and providing an audited report about the financial results of these consulting activities. Secondly the company hired and payed its own auditors. This again is a conflict of interest built into our legal system because the auditor has a reason why he or she cannot issue a fault-finding report on the company that is paying him or her. The auditors should have come from other companies. Third, this company was allowed to manage its employee’s pension funds. This again made the company have a reason of using these funds in ways that advantaged the company but on the other hand, disadvantaged the employees. Enron had codes of ethics that prohibited its managers and executives from being involved in another business entity that did business with it. However, these codes of ethics were voluntary and could be set aside by the board of directors. The legal structure nowadays allows managers to enter these arrangements, which form a divergence of interest. The managers and executives, of course, have a fiduciary duty to act in the best interest of the company and its shareholders, but the law leaves considerable discretion to managers and executives to exercise their own business judgment about what is in the best interests of the company therefore, giving room to corruption loopholes.
|1330 (cca 3.5 pages)
You examine the issue about ENRON as though you were an insider to the organization. But the inromation you have provided is much needed as basis for further analysis.