Question

What are some of the corporate governance issue addressed in the PBS documentary "Bigger Than Enron"?

Answer 1

Failure of a large level company Eron raised serious questions on corporate governance of the company & capital market as well. As we know that Eron had a good position in the market and also was leading company but failure of this company made everybody surprised.

So let’s see various corporate governance issues;

1. Presence and effectiveness of watchdogs because inspite of existence of SEC all went wrong. Thus this question is very impportant that was this supreme body able to monitor the affairs of the corporation?

2. Was there is any illegal & unethical link between officers of supervisory body and official of the company?

3. Was watchdogs overburdened? So due to such overburden supreme body was not able to monitor eeficiently.

4. Question was raised on the responsibility and work style of the board of directors.

5. Were auditors performed their duties effectively?

6. Were auditors truly identified real faults about the company?

7. Were auditors communicated true & fair image of the company to relevant stakeholders?

8. Questions were raised on the performance of credit rating agencies. As we know that credit rating have solid impact on the capital market.

9. Operating efficiency of investment bankers also questioned due to failure of Eron.

So overall we can say that failure of Eron rasied multiple question on the corporate governance and these questions were quite reasonable because if these faults are not fixed in proper way then it may leads to more negative results in future time.