The Fall of Enron
Ethical Dilemma and Enron’s Collapse
This questions must be answered in details
Explain what justified mr ebbers to take out the loans from his company? How this example was considered as a conflict of interest was the compensation scheme in the best interest of share holders interests ? explain the justification of board of directors to approve these loans to mr ebbers and other members. What are the consequences of these compensation schemes on the board of directors CEO’s and shareholders? What alternative and solution you would suggest to solve this ethical dilemma?
The Fall of Enron
The collapse of energy giant Enron in 2001 showed how catastrophic the agency problem can be. The company’s officers and board of directors, including Chairman Kenneth Lay, CEO Jeffrey Skilling and CFO Andy Fastow, were selling their Enron stock at higher prices due to false accounting reports that made the stock seem more valuable than it truly was. After the scandal was uncovered, thousands of stockholders lost millions of dollars as Enron share values plummeted.
The aim of this assignment is as follows:
- & Understand the basic ethics behind agency problem in business.
- &; Use what you have learnt so far on the course to this project
WHAT YOU HAVE TO DO:
You should submit a 1000 words case study report on Principle agent problem in business companies.
You must follow Qatar University’s formatting guidelines and include references. The report will be graded on the detailed criteria outlined on page three of this document. The recommended layout of your report is given in the following bullet points.
- &; Cover page (your names, date & number of words)
- & Executive summary (A high level summary of the project)
- & Table of contents
- & Introduction (background of chosen banks, firm or institution)
- &; What the chosen company is doing regarding your chosen topic.
- & Analysis and evaluation.
- & Recommendations
- & Conclusion (summarize all the above)
- & References
- &; Your project should be no more than 1000 words (executive summary and any references and appendices do not count towards the word limit).