Enron Corporation
Hassan Suluki
Strayer University

Enron Corporation
Q. 1. Describe how Enron could have been structured differently to avoid such activities.
Ans: To avoid bankruptcy Enron should have scanned its ethical environment and put safeguards in place. A lot of corporations have cultures. Structures should have been in place to examine its corporate culture carefully, particularly in terms of its behavioral norms and values. Its directors should have considered conducting a formal audit of its corporate culture from the standpoint of approaches, perceptions, values, standards of conduct, pressures to commit misconduct, communications, risks, and weaknesses.
Writing a code of conduct, supporting it at top levels and communicating it to employees is just a start. Corporations should have a committee of independent non-executive directors on its Board of Directors who are responsibility for ensuring that systems are in place in the corporation to guarantee employee obedience with the Code of Ethics.
Measures they recommend should include staff training, evaluations of compliance systems, appropriate funding and staffing of the corporate ethics office, and effective protections to employees who "blow the whistle" on perceived actions contrary to the essence or letter of the Code.
Every member of the Board of Directors of a publicly listed corporation should be required to sign the Code of Ethics and pledge that she or he will never support a board motion to suspend the Code. All outside law firms and auditing firms that consult to publicly list corporations should be required to sign statements noting that they understand and accept the corporation's Code of Ethics.
Allowing Arthur Andersen to both audit and consult with Enron created at least an appearance of a conflict of interest. Subsequently, hiring Arthur Andersen employees as Enron employees who then managed the affairs of their former colleagues made this a real ethical conflict of...