In the wake of one of the largest scandals in US history, many of us could just drop our jaws in shock and disgust of how low people in our society get go, pertaining to the burden they put on their shareholders and employees. Fiduciary duty is defined as a person or entity whose property or power is entrusted for the benefit of another. Enron did not carry out their fiduciary even to the smallest extent…the evidence being their secrecy of their partnerships and the selfishness and profit hungry individuals who ended up ruining just about every employees life and retirement funds. The limitation behind the board of trustee’s effectiveness deals with Lay’s secrecy. How can the board of trustee’s be effective when nobody but the high executives knew about the partnerships in the first place? This is true example how what goes on behind closed doors, sometimes stays behind closed doors. We all know that if anybody on the board decided to squeak out any information, many, if not all, would lose their multimillion dollar salaries in an instant. I don’t know about you, but how can a board of trustee’s be effective if they aren’t letting the community around them know about the importance of many things that are going on around the company itself. I understand that some things need to stay out of public view, but the fact of the matter is that if it deals with the company’s well-being and survival of the company, somebody should be relaying that information to their employees. The magnitude of Enron’s problem not only sunk them into jail, it brought down almost every single employee with them.
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3 comments:
I completely agree with your statement about Enron. Fiduciary duty's were breached when Enron and executives officers were made aware of numerous practices that made Enron's stock an inappropriate Plan investment during the Class Period. The fiduciaries failed in their duty to disclose and inform the 401(k) participants regarding this information. Instead they encouraged participants and beneficiaries of the Plan to continue to make and maintain substantial investments in the Company Stock Funds in the Plan.
What Enron did was completely wrong and immoral.
I also agree with Danielle and John, it is pretty hard to go against them and think that Enron didnt breach their Fiduciary duties. Enron "accumilated 27 billion dollars in the dept hidden from partners, investors and employees". A company that has that many skeletons in their closet is due for failure and that is exactly what happened to enron. In the end Enron had poor communication with in the company starting at the top and for a company to work and be successful communication has to run from the top all the way to the bottom.
Fiduciary duties were breached in the Enron situation. They went behind not only the community but their own employees backs. They had 27 billion dollars from their hidden partners. I think it is completely ridiculous and just goes to show how money hungry and self fish people can be. Their decisions were completely immoral and wrong.
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