Learning from Enron

9 Pages Posted: 2 Jun 2004

See all articles by Simon Deakin

Simon Deakin

University of Cambridge - Centre for Business Research (CBR); European Corporate Governance Institute (ECGI); University of Cambridge - Faculty of Law

Suzanne J. Konzelmann

University of London - Birkbeck College - Faculty of Social Sciences, School of Management and Organizational Psychology; University of Cambridge - Faculty of Social and Political Sciences

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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

Deakin, Simon F. and Konzelmann, Suzanne J., Learning from Enron. Available at SSRN: https://ssrn.com/abstract=528743

Simon F. Deakin (Contact Author)

University of Cambridge - Centre for Business Research (CBR) ( email )

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European Corporate Governance Institute (ECGI)

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HOME PAGE: http://www.ecgi.org

University of Cambridge - Faculty of Law ( email )

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Cambridge, CB3 9DZ
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Suzanne J. Konzelmann

University of London - Birkbeck College - Faculty of Social Sciences, School of Management and Organizational Psychology ( email )

Malet Street
Bloomsbury
London, WC1E 7HX
United Kingdom
+44 (0) 207 631 6799 (Phone)

HOME PAGE: http://www.bbk.ac.uk/management/our-staff/academics/konzelmann

University of Cambridge - Faculty of Social and Political Sciences ( email )

ESRC Centre for Business Research
Cambridge, CB2 1TN
United Kingdom
+44 1223 337733 (Phone)

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