I- Presentation and chronology
II- The financial arrangement
III- How the governance can explain it ?
IV- Questioning the corporate governance model
I- Presentation and chronology:
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Enron employed approximately 20,000 staff and was one of the world's major electricity, natural gas, communications, and pulp and papercompanies, It was created in 1985, by the merger of the Houston Natural Gas company with InterNorth. This merger was management’s first attempt to develop a national pipeline system for natural gas. The following year, the former CEO of Houston Natural Gas, Kenneth Lay, became the chairman and CEO of Enron. At the beginning, its business model was very classic: production and transportation of gas, and distribution essentially on whosales markets. Quickly it became the major energy and petrochemical commodities trader in US. Throughout the late 1990s, Enron was almost universally considered one of the country's most innovative companies. The magazine Fortune named Enron "America's Most Innovative Company" for six consecutive years, from 1996 to 2000. In 1996, Jeffrey Skilling, old consultant of McKinsey, became the president and Chief Operating Officer of Enron, seven years after his enter his entry in the company. Enron has $40 billions in 1999, and $100 billions in 2000, thanks to the launching of EnronOnline, a trade platform where there is about 2100 products derived which can be exchange. It was a the largest trading exchange as one of the key market makers in natural gas, electricity, crude oil, petrochemicals and plastics.
Enron diversified into coal, shipping, steel & metals, pulp & paper, and even into such commodities as weather and credit...