Rajarajeswari Raveendran (1202164003) Introduction • Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. • It was founded in 1985 as a merger between Houston Natural Gas and Inter North, both relatively small regional companies. • Enron employed approximately 20,000 staff and was a major electricity, natural gas, communications and pulp and paper company, with claimed revenues of nearly $101 billion during 2000. • Fortune named Enron "America's Most Innovative Company" for six consecutive years. • At the end of 2001, it was revealed that Enron's reported financial condition was sustained by institutionalized, systematic, and creatively planned accounting fraud, known since as the Enron scandal. • Enron has since become a well-known example of wilful corporate fraud and corruption. • The scandal also brought into question the accounting practices and activities of many corporations in the United States and was a factor in the enactment of the Sarbanes Oxley Act of 2002. • The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm. • Enron declared its bankruptcy on December 2, 2001, Products
• Products traded Enron
• Petrochemicals • Plastics • Power • Pulp and paper • Steel • Weather Risk Management
• Oil and LNG transportation
• Broadband
• Principal investments
• Risk management for commodities
• Shipping / freight
• Streaming media
• Water and wastewater
Corporate and Corporate Governance
• Corporate is the most common form of business organization, and
one which is chartered by a state and given many legal rights as an entity separate from its owners
• Cooperate governance is a set of systems , structures ,processes
and mechanisms by which a corporate entity is led, directed and controlled in the best interests of shareholders and other stakeholders Sarbanes-Oxley Act in 2002
• Aimed at restoring investor confidence in the United States capital
markets, the Act introduced a number of regulatory reforms in accounting and in required corporate reporting • Introduced regulatory reform in the accounting profession, imposed additional disclosure and financial reporting responsibilities for corporations and created individual liability for top executives • The act prohibits an outside auditor from providing any other concurrent services, namely consulting, to the company to which it is auditing Recommendation
• Transparency and accountability at the decision-making level of the
firm • Having transparent corporate boards makes it definitely more desirable for managers to commit to a no bribe policy when dealing with public officials who request support with regards to outstanding payments • This transparent system makes bribery in general much harder • Tax reliefs, the offer of premiums for corporations or the introduction of not profit-orientated remuneration systems Conclusion
• Enron Corporation was an American energy, commodities, and
services, company based in Houston, Texas • Enron’s meltdown exposes at least several key corporate governance issues which are the importance of the board’s oversight power and the potential conflicts of interest arising from working too closely with auditors • The Enron failure has not been the result of just questionable activities by Enron’s executive management team • The cast of contributors to the failure and bankruptcy are both inside and outside the company, it’s the total system that resulted in failure. Add a Slide Title - 4
ZERO TO MASTERY IN CORPORATE GOVERNANCE: Become Zero To Hero In Corporate Governance, This Book Covers A-Z Corporate Governance Concepts, 2022 Latest Edition
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