What can the Stakeholder Theory Learn from Enron?

Roughly speaking, Enron has done for reflection on corporate governance what AIDS did for research on the immune system. So far, however, virtually all of this reflection on and subsequent reform of governance has come from those with a stake in the success of modern capitalism. This paper identifies a number of governance challenges for critics of capitalism, and in particular for those who urge corporations to voluntarily adopt missions of broader social responsibility and equal treatment for all stakeholder groups. I argue that by generally neglecting the governance relation between shareholders and senior managers, stakeholder theorists have underestimated the way in which shareholder-focused governance can be in the interests of all stakeholder groups. The enemy, if you will, is not capitalists (shareholders), but greedy, corrupt or incompetent managers. A second set of governance challenges for stakeholder theorists concerns their largely untested proposals for governance reforms that would require managers to act in the interests of all stakeholders and not just shareholders; in other words to treat shareholders as just another stakeholder group. I suggest that in such a governance regime it may be almost impossible to hold managers accountable to anyone – just as it was when state-owned enterprises were given “multi-stakeholder” mandates in the 1960s and 1970s.

Information disclosure and corporate governance in listed companies in China: from Yinguangxia to Enron

China's path to the development of a modern securities market has not been a smooth one. This article argues that efforts to impose Western securities market models on China have been fraught with difficulty. This is especially clear from the adoption of information disclosure principles and practices. While the integrity of disclosure practices is a fundamental element in maintaining investors' confidence in securities markets, disclosure practices need to be attuned to China '5 systemic features, especially in regard to its legal structure and rules. Market failures, such as the collapse of Enron in the United States, have led to a realisation that US disclosure models have their own difficulties and that these should not be uncritically used. This article reviews recent Chinese law andpractice (using the Yinguangxia false disclosure scandal as an example) in this area and calls for the adoption of a more critical approach towards the use of Western models with particular regard to China's own distinctive pathways of reform.

Enron. Con : “He that filches from me my good name … makes me poor indeed”

This critique functions as an introduction to this special issue of Critical Perspectives on Accounting; an edition that embraces themes pertaining to the catastrophic collapse of Enron. In an effort to place the research published in this edition in context, I provide a critical analysis of the accounting and corporate governance implications of the demise of Enron, the subsequent public outcry, and the legislative reforms to date. I conclude with an exploration of how the studies in this special issue contribute to understanding the myriad of forces behind major events such as this.

Enron's Dabhol power project in India

In the early nineties, Enron USA went to India to set up a $3 billion power plant at the express invitation of the then Indian government. The process and incidents associated with the setting up of the Dabhol Power Company are highly relevant, even in current times, for companies who intend to set up operations in India. The case is a good example of the strategic importance of ethical corporate decision-making and good stakeholder management practices as an inherent part of a company's culture. If a company lacks this understanding, then it is likely to experience stakeholder opposition and stakeholder management disasters that can ultimately have a serious impact on the company's success.

Accounting reform and investor protection : hearings before the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundred Seventh Congress, second session, on the legislative history of the Sarbanes-Oxley Act of 2002, accounting reform and investor protection issues raised by Enron and other public companies.

Shipping list number: 2003-0249-P (volumes 1-2, 4), 2003-0247-P (volume 3).