Enron's Credibility

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What is credibility?
Credibility involves reputation which is the level of trust that investors, partners, customers, and financial institutions have in a company. An eternal truth left for us from Desiderius Erasmus in 1400s states that, “We sow our thoughts, and we reap our actions; we sow our actions, and we reap our habits; we sow our habits, and we reap our characters; we sow our characters, and we reap our destiny.” This is still very true today. The intentions, actions, habits, and character of a company determine the credibility of that company.
Credibility produces trust in a company and all its communications. Many companies are tempted to embellish their promises but realize that it is not really worth the effort. As a result, many …show more content…
There were many activities that Enron engaged in that contributed to its demise. Jeffrey Skilling was hired as the CEO of Enron and put together a staff that hid billions of dollars in debt, and conspired with the CFO and auditors at Andersen to cover it up and mislead the board of directors. Enron’s board of directors was considered exemplary in the industry, but based on the above definition, a poor job was done in the governance and mitigating the risks. There was poor risk …show more content…
& Conrad, J. (2009). Credibility: your most important asset. Bioentrepreneurdoi:10.1038/bioe.2009.8 http://www.nature.com/bioent/2009/090801/full/bioe.2009.8.html?foxtrotcallback=true#a1
Healy, P. M. & Palepu, K. G. (2003). The Fall of Enron. Journal of Economic Perspectives. 17 (2): 15. doi:10.1257/089533003765888403.

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