Apparently, companies in the present day scenario emphasise more on developing themselves as an improved unit both in an ethical and legal manner. Observably, business focuses more on confirming that their operational activities cause minimal negative impact on people of the external business environment (Jennings, 2010. Blythe & Zimmerman, 2005). However, with the emergence of high profile corporate breakdowns in the recent years, questions have been raised on the present rules and frameworks along with the effectiveness of the corporate governance practices amid the companies. In this regard, the corporate collapse of Enron is one of the prime example where the ineffectiveness of corporate governance practices is largely visible (KPMG, 2010. Baijal, n.d.). In order to acquire a comprehensive understanding with regard to the failure of the company i.e. Enron, this essay will highlight the corporate issues and gaps of the company prior to its downfall which ultimately resulted in its total collapse. The essay will also ensure a thorough discussion about how the laws of corporate governance have strengthened aftermath of the Enron downfall.
As depicted above corporate governance is one of the most vital aspects that are associated with the operations of the business units in the modem day business context. In today’s scenario the reputation of any business is largely determined by its ability to assure appreciative performance in the domain of corporate governance. However, with the increasing number of accounting fraud and failures of companies to adhere to particular legal and ethical standards in conducting business, the aspect of corporate governance has emerged as one of the major issue in the business sector today. The issue of corporate governance has mostly gathered strength especially after the collapse of Enron owing to accounting frauds in the year 2001.