Evil That Was Enron

In: Business and Management

Submitted By planearium
Words 684
Pages 3
Section 1: Enron began back in 1985 when Houston Natural Gas entered into a merger with InterNorth. At the time of the merger, Kenneth Lay, who was the former CEO of Houston Natural Gas, was elected CEO, and later went on to become Chairman, which then made Jeffrey Skilling CEO and Andrew Fastow CFO of Enron. Once a sleeping giant of natural gas pipelines, Enron grew to become the seventh largest Fortune 500 company, and sixth largest in the world(Silverstein, 2013); but due to its shady business practices, such as hiding billions of dollars in debt through accounting loopholes, special purpose entities, and poor financial reporting, the company was forced to claim bankruptcy in December 2001, resulting in over 5,600 employees losing their jobs. This financial decline was mainly in part to the corrupt and competitive corporate culture created by leadership, who emphasized competition and financial goals which led to jail sentencing and new legislation to further prevent corporate scandals.
Section 2: Enron's Board consisted of seventeen members, but only two were employed by Enron(Lay and Skilling) while the other fifteen came from various billets and organizations such as Texas Senator Phil Gramm's wife, former British Cabinet Member John Wakeham and CEO of Comdisco, Norman P. Blake Jr. Not only were the board of directors and their direct family members impacted, but the nearly 6,000 employees and the lives and well being of their family as well. On a larger scale, the United States Government was involved and over 30 new forms of legislation were proposed in spite of Enron's actions, not to mention how Enron's home city of Houston was affected socioeconomically. Also, the diverse investors of the 58 million shares of stock who experienced extreme monetary losses.
Section 3: In an introductory statement to the revised Enron Code of Ethics issued in…...

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