Learning from Enron

Simon Deakin and Suzanne J. Konzelmann

Working Papers from Centre for Business Research, University of Cambridge

Abstract: This essay argues that the Enron affair has been misunderstood as a failure of monitoring, with adverse consequences for the drafting of the Sarbanes-Oxley Act and the Higgs report. Where Enron’s board failed was in underestimating the risks that were inherent in the company’s business plan and failing to implement an effective system of internal control. Enron demonstrates the limits of the monitoring board and points the way to a stewardship model in which the board takes responsibility for ensuring the sustainability of the company’s assets over time.

Keywords: Enron; corporate governance; shareholder value; internal control; non-executive directors; monitoring board; stewardship (search for similar items in EconPapers)
JEL-codes: G38 K22 (search for similar items in EconPapers)
Date: 2003-09
New Economics Papers: this item is included in nep-his and nep-law
Note: PRO-2
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp274

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