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Learning from Enron

Author

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  • Simon Deakin
  • Suzanne J. Konzelmann

Abstract

This paper 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 misunderstanding the risks which 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.

Suggested Citation

  • Simon Deakin & Suzanne J. Konzelmann, 2004. "Learning from Enron," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(2), pages 134-142, April.
    • Handle: RePEc:bla:corgov:v:12:y:2004:i:2:p:134-142
    DOI: 10.1111/j.1467-8683.2004.00352.x
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    Cited by:

    1. Yahya Ali Al-Matari & Abdo Ali Homaid & Hassan Alaaraj, 2016. "The Influence of Audit Committee Effectiveness on Banks' Performance in Yemen," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1424-1428.
    2. Windsor, Duane, 2009. "Tightening corporate governance," Journal of International Management, Elsevier, vol. 15(3), pages 306-316, September.
    3. Martin Kyere & Marcel Ausloos, 2021. "Corporate governance and firms financial performance in the United Kingdom," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1871-1885, April.
    4. Oliver Henk, 2020. "Internal control through the lens of institutional work: a systematic literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 239-273, September.
    5. Brian Kulik & Michael O’Fallon & Manjula Salimath, 2008. "Do Competitive Environments Lead to the Rise and Spread of Unethical Behavior? Parallels from Enron," Journal of Business Ethics, Springer, vol. 83(4), pages 703-723, December.
    6. Imoleayo F. Obigbemi & Eddy O. Omolehinwa & Dick Oluku Mukoro & Egbide Ben-Caleb & Olamide Adeola Olusanmi, 2016. "Earnings Management and Board Structure," SAGE Open, , vol. 6(3), pages 21582440166, September.
    7. Yahya Ali Al-Matari & Sallahuddin Hassan & Hassan Alaaraj, 2016. "Application of Basel Committee's New Standards of Internal Audit Function: A Road Map towards Banks' Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1014-1018.
    8. Yahya Ali Al-Matari & Abdullah Kaid Al-Swidi & Faudziah Hanim Bt Fadzil & Ebrahim Mohammed Al-Matari, 2012. "Board of Directors, Audit Committee Characteristics and Performance of Saudi Arabia Listed Companies," International Review of Management and Marketing, Econjournals, vol. 2(4), pages 241-251.
    9. Kallifatides, Markus & Petrelius Karlberg, Pernilla, 2012. "What makes for a value-creating corporate board? A literature synthesis and suggestions for research," SSE/EFI Working Paper Series in Business Administration 2012:1, Stockholm School of Economics, revised 25 Jun 2013.
    10. Mary Kehinde Salawu, 2017. "Factors Influencing Auditor Independence among Listed Companies in Nigeria: Generalized Method of Moments (GMM) Approach," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(8), pages 191-203, August.
    11. Duncan McLaren, 2004. "Global Stakeholders: corporate accountability and investor engagement," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(2), pages 191-201, April.
    12. Malik Abu Afifa & Fares Alsufy & Ahmad Abdallah, 2020. "Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 500-516.
    13. Lippert, Inge, 2008. "Perspektivenverschiebungen in der Corporate Governance: Neuere Ansätze und Studien der Corporate-Governance-Forschung," Discussion Papers, Research Unit: Knowledge, Production Systems and Work SP III 2008-302, WZB Berlin Social Science Center.

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