We will assess how governance and incentive problems contributed to Enron’s rise and fall. A well-functioning capital market creates appropriate linkages of information, incentives, and governance between managers and investors. This process is supposed to be carried out through a network of intermediaries.
We show that despite this elaborate corporate governance and intermediation network, Enron was able to attract large sums of capital to … [ Read more ]
Content: Article | Authors: Krishna Palepu, Paul Murray Healy | Source: “Journal of Economic Perspectives” | Subject: Corporate Governance