I will be posting daily, whether I go viral or receive just 1 view. I'll keep posting to test whether consistency works.
In 2019, while I was in litigation with my previous employer (a story for another day), I completed an MSc in Investment Management. It was there that I learned about the fall of Enron.
Enron, once a respected company, crashed in 2001 due to executives lying about profits and debts. They tricked investors and regulators with fake financial reports. When the truth came out, Enron went bankrupt, causing big losses for investors and workers. The scandal showed big problems in how companies are watched and how they report their finances.
Here are 5 key takeaways for founders and professionals:
1. Ethical Leadership - Prioritise ethical behavior and integrity in all business practices to build trust and credibility with stakeholders.
2. Transparency and Accountability - Maintain transparency in financial reporting and operations, and establish robust accountability mechanisms to prevent fraudulent activities.
3. Corporate Governance - Implement strong corporate governance structures, including independent oversight and effective internal controls, to ensure proper oversight and risk management.
4. Risk Management -Develop comprehensive risk management strategies to identify, assess, and mitigate potential risks, including financial, operational, and reputational risks.
5. Culture of Compliance- Foster a culture of compliance and adherence to regulations, with emphasis on promoting ethical decision-making and reporting any misconduct or irregularities promptly.
During their bankruptcy, enron reported losses of in excess of $3.2 billion. However, investor losses would increase that to tens of billions.
In summary, no organisation is too big to fail.
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