Key Concepts
The system of rules, practices, and processes by which a company is directed and controlled.
Corporate Governance
The year Enron collapsed, after being the 7th-largest company in the U.S.
2001
The possibility that an uncertain event will negatively affect a company's objectives.
Risk
The processes and controls that ensure a company follows laws and ethical standards.
Compliance
The obligation to disclose relevant, timely, and truthful information to stakeholders
Transparency
Individuals or entities that own shares in a company.
Shareholders
The auditing firm that collapsed along with Enron due to its conflict of interest.
Arthur Andersen
The type of risk when a currency devaluation reduces the value of revenue earned abroad.
Financial/Currency Risk
The right action when a supplier offers a "gift" in exchange for a contract without bidding.
Declining it / reporting
This body must disclose executive compensation in the annual report
Board of Directors
All the groups affected by a company's activities, not just its owners.
Stakeholders
Approximately how much money was lost in the fraud?
70.000B / USD
The type of risk when a natural disaster halts operations at a warehouse.
Operational Risk
Measures to prevent, detect, and sanction acts of corruption within and outside a company.
Anti-corruption
When a company withholds information for a legitimate reason, like an ongoing investigation
Not Transparent but Ethical
The economic and non-economic benefit a company generates for its stakeholders.
Value
What technique was used to carry out the fraud?
Mark to market
The type of risk when tax regulations suddenly change in a country where a company exports.
Regulatory/Legal Risk
What an employee should do after discovering a colleague is falsifying sales figures.
Confidential channel
When a company is honest about a wrongful practice, but that doesn't make it acceptable
Transparent but Unethical
The set of moral principles guiding behavior toward what is right, beyond the law.
Ethics
The stakeholder group that lost the most when Enron collapsed (lost their pension savings).
Employees
The type of risk when an unverified viral post accuses a company of pollution
Reputational Risk
A situation where a director's personal interests unduly influence their decisions.
Conflict of Interest
The board sub-group responsible for reviewing financial statements before they're published.
Audit Committee