Enron Corporation (former NYSE ticker symbol ENE) was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world's major electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion during 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years. At the end of 2001, it was revealed that its reported financial condition was sustained substantially by an institutionalized, systematic, and creatively planned accounting fraud, known since as the Enron scandal. Enron has since become a well-known example of willful corporate fraud and corruption. The scandal also brought into questions the accounting practices and activities of many corporations in the United States and was a factor in the creation of the SarbanesOxley Act of 2002. The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen (AA) accounting company.

Enron filed for bankruptcy protection in the Southern District of New York during late 2001 and selected Weil, Gotshal & Manges as its bankruptcy counsel. It ended its bankruptcy during November 2004, pursuant to a court-approved plan of reorganization, after one of the most complex bankruptcy cases in U.S. history. A new board of directors changed the name of Enron to Enron Creditors Recovery Corp., and emphasized reorganizing and liquidating certain operations and assets of the pre-bankruptcy Enron. On September 7, 2006, Enron sold Prisma Energy International Inc., its last remaining business, to Ashmore Energy International Ltd. (now AEI).

Tasks:

1. Discuss the corporate governance failure leading to the collapse of Enron.
2. Discuss the role of audit firm AA and failure of the accounting profession leading to the collapse of Enron.
3. Discuss whether a coded law (i.e. an Act) can mitigate the problem of accounting and corporate scandals given the US example of SOX.
4. Compare and contrast voluntary based and coded-law approach to corporate governance.
5. Discuss the relevance of Board of Directors in the corporate governance setting and noting ways of improving the effectiveness of board of directors.