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      Cheryl WallaceCheryl Wallace

      As many others have stated the key issue was greed. Enron exec’s and management were in collusion and there was conflict of interest in the board members.

      /What was the fundamental problem that led to the failure of Arthur Andersen?

      Long term sustainability was traded for short term gain of key people. Likely CEO compensation was tied to closely to short term KPI’s. The complexity of the organization became too complex for even the board to have oversight. Possibly lack of interest also and not taking their responsibility seriously.

      2. Who was responsible for this problem?

      Ultimately the board was responsible. They should have asked better questions / better reporting and asked more of the auditors about warning signs.

      3. What governance decisions could have been made differently to change the outcome of this case?

      Possibly more independent members of the board to ensure arm’s length and no conflict of interest. Maybe better expertise on the board with specific key areas of knowledge.
      4. What does the the Arthur Andersen case highlight about broader challenges in corporate governance?
      greed permeates so many areas of business. Having better oversight and independence to ensure corp governance is being followed.

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