In the Enron scandal there have been many failures and the outcome to this is a practical standpoint which included a moral hazard in the company where managers where elaborating and not managing the companies risks. Take in to account the risks that had not been managed properly to certain extent in the company. Anglo-American system of corporate governance is centered as the ownership of an establishment and it is extensively circulated between the differences in shareholders than the ownership of being focused on the Sarbanes Oxley Act of 2002.
Anglo-American corporate governance is a primary aim of maximizing the shareholders value, which improves the access of savers on firms to make investments opportunities. As a company Enron was seen as the archetypal business that managed shareholders values. The reason for this is the collapse was likely to resonate because of the concerns of effects and the dominance of ‘shareholders value’ norm in the Anglo-American corporate governance. It was attributed that the failure to Enron was the elements of fraud being underpinned in the company 's collapse. The dominant policy response to the collapse is that Enron was mostly focused on the corporate governance issues. The main results of Sarbanes Oxley Act 2002 and the Higgs review shows that the Enron’s failures brought to attention as to the lack of oversight from the board directors, managers were required to promote the success of the company for the benefit of the shareholders. They comply with their duties if they increase the banks risk profile at the cost of the final no-adjusting creditor the state.
The board directors had to oversee corporate management as a purpose of protecting its interests of shareholders, Enron board wai...
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Take into account on regards to the actions of the company executives, the reason because of the companies’ structure whether the business is ethically comprehensive. Analyzing of the business it has detected unethical acts to Enron’s collapse. The true lesson of Enron is that until the power of the shareholder value
norm is broken, effective reform of corporate governance will be on hold. But while there may well have been fraud at Enron, and conflicts of interest, these were not the sole or even the principal reason for the company’s collapse. Instead, Enron appears to have been a case of mismanagement of corporate risk. Enron collapsed because of a systemic failure in which the company’s business plan and its accounting policy were implicated. The company’s managers pursued a strategy of minimizing its fixed costs with the aim of boosting its share price.
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