The business managers of Enron would definitely have put in to practice of whatever they have been taught or trained in their schools of Law, business, management and accounting, to protect the shareholders’ interests of the corporation. However the pertinent question is what went wrong and where? Considering the various maneuverings that happened in Enron in the guise of protecting the shareholders interest, it may also be said that the same managers would have acted more aggressively in enhancing the shareholders wealth, had Enron been a successful business venture.
“The catastrophe caused by the failure of Enron could not compare with the damage this company would have caused if it had succeeded. The relentless emphasis on the importance of shareholder value in recent times has created the conditions for the disconnection of corporations such as Enron form their essential moral underpinnings, encouraging them to concentrate exclusively on financial performance, and to neglect not just the wider stakeholder interests of customers and employees, but the essential interests of the economies and communities in which they operate. The problem with established corporate governance is that they misconceive the irreducible core of corporate governance, at the same time as underestimating the complexity of the phenomenon.”
This paper attempts to make a presentation on the style and working of the two models of business ventures one working in the direction of protecting exclusively the shareholders interests and the other which works to protect the stakeholders’ interest and the relative conflicts and issues that may emanate in pursuing both the interests, in the light of the
With a proper understanding and adherence to all of the above parameters, a team of management can take the corporate they are governing to greater heights for sure.