Law Commons^™

Enron And The Dark Side Of Shareholder Value, William W. Bratton

Georgetown Law Faculty Publications and Other Works

This Article addresses the implications that the Enron collapse holds out for the self-regulatory system of corporate governance. The case shows that the incentive structure that motivates actors in the system generates much less powerful checks against abuse than many observers have believed. Even as academics have proclaimed rising governance standards, some standards have declined, particularly those addressed to the numerology of shareholder value. The Article's inquiry begins with Enron's business plan. The Article asserts that there may be more to Enron's "virtual firm" strategy than meets the eye beholding a firm in collapse. The Article restates the strategy as …