Agency problem in Enron
The Fall of Enron
The collapse of energy giant Enron in 2001 showed how catastrophic the agency problem can be. The company's officers and board of directors, including Chairman Kenneth Lay, CEO Jeffrey Skilling and CFO Andy Fastow, were selling their Enron stock at higher prices due to false accounting reports that made the stock seem more valuable than it truly was. After the scandal was uncovered, thousands of stockholders lost millions of dollars as Enron share values plummeted.
In your essay, discuss the agency problem in Enron and how the motives were originated, the unethical practices of the board of directors, their CEOs that propagated the problem, and the outcomes of these practices on the company's shareholders. What alternatives and solutions would you suggest to solve this ethical dilemma?
WHAT YOU HAVE TO DO:
You should submit a 1000 words case study report on Principle agent problem in business companies.
You must follow Qatar University's formatting guidelines and include references. The report will be graded on the detailed criteria outlined on page three of this document. The recommended layout of your report is given in the following bullet points.
· Cover page (your names, date & number of words)
· Executive summary (A high level summary of the project)
· Table of contents
· Introduction (background of chosen banks, firm or institution)
· What the chosen company is doing regarding your chosen topic.
· Analysis and evaluation.
· Recommendations
· Conclusion (summarize all the above)
· References
Your project should be no more than 1000 words (executive summary and any references and appendices do not count towards the word limit).
Reading list:
https://www.nytimes.com/2011/11/08/opinion/end-bonuses-for-bankers.html?_r=0
https://euractivgreece.blogactiv.eu/2013/06/30/124/