In 2002 Enron went bankrupt which resulted in one of the biggest bankruptcies in the US history. Investigators focused themselves on Enron Executives. I will assess if the Enron executives acted morally wrong by examining their human actions.
To assess the case in terms of the discourse of morality I compare the facts of the situation at Enron with a relevant moral principle in the society surrounding Enron. I start by quoting one of the human actions done by executives of Enron. ‘At the heart of Enron’s demise was the creation of partnerships with shell companies. These Shell Companies, run by Enron executives who profited richly from them, allowed Enron to keep hundreds of millions of dollars in debt of fits books. But once stock analysts and financial journalists heard about these arrangements, investors began to lose confidence in the company´s finances. The results: a run on the stock, lowered credit ratings and insolvency’.
From a hermeneutic perspective the ultimate justificatory question to be asked is whether people living in a well-ordered-society could reasonably want to live in circumstances in which a particular principle was not accepted as a general principle. A relevant moral principle surrounding the society of Enron is honesty. Without honesty the free market cannot function and will collapse. Enron deceived investors by setting up these constructions. Which is proved by the fact that when investors heard about these constructions they began to lose confidence in the company; thus investors felt being deceived. Since rational people don’t want to live in a society where it is allowed to deceive people (assuming this is a normal case) honesty is a moral principle. This means that it is a justified moral principle that every-one must acknowledge. I conclude thereby that Enron executives acted morally wrong by deceiving investors.
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2 comments:
I agree with 892525 but I want to add another point of view to the Enron case.
The executives of Enron were not only deceiving the investors. They were also deceiving their own employees and not just deceiving, they were stealing money from them.
The executives kept saying to the employees to buy Enron stocks, while they self were selling it. By doing this, the executives took an advantage out of it and indirectly were stealing from their employees.
It was also the case that the pension savings of thousands of workers was gone. This was money destined to the employees, for their old-days. Hence, the executives were acting morally wrong, because they were stealing, deceiving, harming ( employees ) and not acting conform law only because their self-interest.
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Evren Ulu
A task of the board of directors is to keep an eye to the day-to-day work of its executives.
In the case of Enron not only the executives were wrong. Also the board of directors didn’t fulfil their task.
The board of directors was not attentive to the nature of the off-books entities created by Enron, nor were they attentive to their own obligations to monitor those entities once they were approved.
Also the board of directors did not pay attention to the employees because they do not consider this as their responsibility. They consider themselves as representatives of shareholders only, but in the case of Enron also this wasn’t the case.
As long as investors are getting rich there is almost none incentive to question executives on the side of the board of directors.
To conclude the Enron case was only possible by working with organizational blocks.
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