At the time of a crisis managerial behaviour seems to have been forgotten for most companies or ignored as some managers out their self-interest ahead of others. The recession of the global crisis occurring now is also blamed on the dishonesty, greed, and weak business ethics. The accounting scandals at Enron, Global Crossing and WorldCom combined with the bursting of the dotcom stock bubble, pushed the economy down in 2001 (Francis, 2008). There are so many people that are engaged in many aspects of finance that have lost their ethical scope and put their short-term personal gains above other considerations. In other words, the economy gets hurt by greed and selfishness as ensuing financial losses mount and trust fades (Francis, 2008). The fraud deceit of corporate governance practices resulted in the bankruptcy of the firm. It not only destroyed the wealth of investors but the careers, incomes and saving of so many of its basic stakeholders and especially its own employees (Eiteman, 2008, p.16).
The top executives that were responsible for the mismanagement that destroyed the firm walked away with huge gains on shares before the downfall and with overly generous severance payments (Eiteman, 2008, p.16). This can also be referred to Richard Fuld who gained about $484 million which he received in salary, bonuses and stock options since 2000.
Another example of poor corporate governance is from “Enron Three”, the former chairman Kenneth Lay, former CEO Jeff Skilling and former CEO Andy Fastow, behaved as the corporate law and accounting rules were not made for them. They used greed, manipulation and collusion to deceive their board of directors, employees, shareholders and others about Enron’s worsening financial condition. Because of these manager’s unethical actions, thousands of Enron employees lost their jobs and the company