solution

Analyse and answer the questions below on Corporate Governance for the company named ENRON.

1. Assess the level of board independence. Outline if the level of independence is acceptable or not, providing reasons for your assessment.
2. Assess the membership of the Audit subcommittee. Based on the table you constructed, would you regard the Audit subcommittee as reliable? Provide reasons for your assessment.
3. Assess the membership of the Nominating subcommittee. Based on the table you constructed, would you regard the Nominating subcommittee as reliable? Provide reasons for your assessment.
4. Assess the membership of the Executive subcommittee. Based on the table you constructed, would you regard the Executive subcommittee as reliable? Provide reasons for your assessment.
5. Assess the membership of the Compensation subcommittee. Based on the table you constructed, would you regard the Compensation subcommittee as reliable? Provide reasons for your assessment.
6. Assess the membership of the Finance subcommittee. Based on the table you constructed, would you regard the Finance subcommittee as reliable? Provide reasons for your assessment.
7. Does any board member sit on an excessive number of boards? Why do you think that?
8. Based on the analysis you conducted, assess the structure of the Enron board. Is it structurally sound?
9. What are some other key features you could look at to determine the independence/effectiveness of the Board?

Consider the following:

1. External/internal directors and director independence

2. Number of board memberships (usually limit to 3 – 5 members)

3. Experience: amount of related industry experience

4. Meeting attendance

5. Committees and committee membership