Question

what was the role of a code of ethics in Enron corporation? how its effect the company?

Answer 1

Importance of Code of Ethics

A code of ethics is a guide of principles designed to help professionals conduct business honestly and with integrity. A code of ethics document will outline the mission and values of the business and how professionals are supposed to approach problems, the ethical principles based on the organization's core values and the standards to which the professional is held. A code of ethics, also referred to as an ethical code, may encompass areas such as business ethics, a code of professional practice and an employee code of conduct.

Both businesses and trade organizations typically have some sort of code of ethics that its employees or members are supposed to follow. Breaking the code of ethics can result in termination from the organization. A code of ethics is important because it clearly lays out the rules for behavior and provides the groundwork for a preemptive warning.

In Case of Enron

The people at the higher level did not follow these codes of ethics and took huge amount of loans by using their Off-balance sheet items very foolishly.

Ethics and integrity are at the core of sustainable long term success for any business. Without them, no strategy can work and, as Enron has demonstrated, enterprises will fail. That’s despite having some of the ‘smartest’ guys in the room.”

So, finally Enron’s heyday has long ended. But its lessons will long endure. The global business community is now watching a painful new chapter is this saga one where its former chief executive officer, Jeff Skilling, is getting a decade shaved off of his prison term that should now end in 2017.