Corporate Collapse, Crime and Governance - Enron, Andersen and Beyond
Australian Journal of Corporate Law, Vol. 14, p. 183, 2002
20 Pages Posted: 31 Jul 2009
Date Written: 2002
The corporate collapses of recent times, such as the massive collapses of Enron in the United States and HIH in Australia, have suggested that there are major systemic problems facing the way in which corporations and corporate governance operate. Some conduct associated with these collapses has been clearly criminal in character, such as the actions of accounting firm Anderson in shredding audit related papers after a regulatory investigation into Enron had been announced. The use of off-balance sheet structures by Enron, so as to avoid adequate disclosure or transparency, has also offended basic corporate governance notions. Some conduct associated with the collapse of pivotal institutions such as these have led to the disqualification of directors and even to the disappearance of one of the world's great accounting firms. Recent corporate collapses have also struck at the basis of investor and public confidence in previously highly regarded companies and professional firms and have led to calls for a reassessment of ethical standards, auditing practices, executive reward structures, governance practices and disclosure principles. This article reviews some of the factors which have led us to this bleak juncture in the history of corporate governance.
Keywords: Enron, corporate governance, corporate collpase, corporate law
JEL Classification: K22, G34, G33
Suggested Citation: Suggested Citation