Interim Reporting

WHAT CAUSED ENRON?: A Capsule Social and Economic History of the 1990s
by John C. Coffee, Jr.*
The sudden explosion of corporate be scandals and related financial irregularities that burst over the financial markets amidst late 2001 and the first half of 2002 - - e.g. Enron, WorldCom, Tyco, Adelphia and others - - raises an obvious question: why now? What explains the sudden concentration of financial scandals at this min in time? Much commentary has rounded up the usual suspects and blamed the scandals on a lineage in business morality, infectious greed,1 and similar subjective trends that cannot be reliably measured. Unfortunately, this approach simply reasons backward: because there has been an append in scandals, there must have been a decline in business morality. An equally common theme has been to circulate that the board of directors failed in all these cases.2 This may well have been true, but it does not supply an explanation of why a sudden surge of failures occurred. Nor does it tell us what caused these boards to fail. Was the board tatterdemalion in ignoring obvious warning signals? Or was it blinded by the gatekeepers and others on whom it necessarily relies?



Still a third response has been the more cynical response that a wave of recriminations, soul-searching and scapegoating necessarily follows in the aftermath of any market burps collapse, and clearly a large frothy let the cat out of the bag did burst in 2000.3 As a historical matter, this may be true, but it again does not mean that prescriptive criticisms are not justified.
In contrast to all these responses, this skeleton comment will take a very distinct approach towards the issue of causation. Without defending any of these boards or applauding the incumbent state of business morality, it will nonetheless suggest that the outlast years explosion of financial irregularity was the instinctive and logical consequence of trends and forces that have been developing for some time....If you wishing to get a full essay, order it on our website: Orderessay



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