ACTG 28A: CORPORATE GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT AND

INTERNAL CONTROL

PANGILINAN, JEWEL D. BSAcc 2-4

202203583

ACTIVITY NO.1
PROVIDE THE PRINCIPLE OF SEC CODE OF GOVERNANCE THAT
ENRON HAS VIOLATED. EXPLAIN.

PRINCIPLE 2:
“THE FIDUCIARY ROLES, RESPONSIBILITIES AND
ACCOUNTABILITIES”
In this principle, Enron’s Company is failed to do the fiduciary roles,
responsibilities and accountabilities due to the fact that fiduciary is the legal
responsibility for duties of care, loyalty, good faith, confidentiality, and more
when serving the best interests of a beneficiary. Strict care must be taken to
ensure that no conflict of interest arises to jeopardize those interests. What
Enron’s Company did is that they don’t give their Stakeholders and Board of
Directors the set of this clearly legal pronouncements and guidelines.
PRINCIPLE 7:
“DUTY-BOUND TO APPLY HIGH ETHICAL STANDARDS”
In this principle, The CEO of Enron’s Company is forgot that he is
legally obliged to do something for theirs company growth while applying the
ethical standards. What did Enron’s Company did is that their Officials
encouraged their employees to be in fraud. Enron mismanaged information,
treated internal and external stakeholders unjustly, put their personal interests
before their employees' and the broader public's, and failed to exercise enough
oversight or accept responsibility for unethical activity.
PRINCIPLE 8:
“ESTABLISH POLICIES, BEST PRACTICES AND REGULATOTY
EXPECTATIONS”
Enron’s Company failed to establish the corporate disclosure policies,
procedures that can lead to their company an accurate, positive benefits and
improved business outcomes. Enron’s company is failed to set this policies in
their company so that their stakeholders and shareholders doesn’t know what
are they doing is fraud and that is not the good practice for the good corporate
governance.
PRINCIPLE 11:
“MAINTAINING A COMPREHENSIVE AND COST-EFFICIENT
COMMUNICATION CHANNEL”
Enron’s Company failed to do this principle it because they are to playing
safe hiding their wrong doings. They can’t even provide the relevant
information but rather an information that will persuade other investors and
shareholders to their fraudulent activities. The way they talk to their investors is
always about how good to invest in their company, in fact that there is no good
communication channel is happening in their company. Effective
communication regarding your business strategies and results helps investors
and shareholders understand the value of their investment in your company. If
you don't communicate (or don't do so well), your shareholders may consider
that their ROI (return in investment) isn't worth the perceived risk.
PRINCIPLE 13:
“ALL SHAREHOLDERS SHOULD TREAT FAIRLY AND
EQUITABLY”
This code of governance is what we need in the company, Enron’s
company failed to treated their shareholders fairly and equitably in reason that
they only gave the information that will persuade their shareholders but not the
relevant one. They also not informed what is totally happening in the company.
In addition to that, the stakeholders was rated according to their performances 1
is the highest and 5 is lowest without knowing what they’re doing is fraudulent
activities of the company.