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External causes for Enron to collapse
Title: External causes for Enron to collapse
Category: Business & Economy
Details: Words: 621 | Pages: 2.6 (approximately 235 words/page)
External causes for Enron to collapse
1)<Tab/>Deregulation
Deregulation of the U.S. energy industry made possible Enron's emergence as a major corporation, but also ultimately may have contributed to its collapse. The company successfully seized the opportunity created by deregulation to create a new business as a market maker in natural gas and other commodities. Enron successfully influenced policymakers to exempt the company from various regulatory rules, for example in the field of energy derivatives. This …showed first 75 words of 621 total…
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…showed last 75 words of 621 total…and other rules that permitted such legal exercise of corporate influence in policymaking.
6) Weak stakeholder oversight.
A case can be made that external stakeholders--especially large institutional investors such as pension and mutual funds--failed to exercise due diligence. These institutional investors were happy to make handsome returns on their extensive investments in Enron in the late 1990s, but failed to become actively involved in corporate governance at the company until it was too late.
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