business. Yet Enron's board of directors decided to pay its managers in the form of stocks and options. In a very simplistic sense, this meant that managements compensation was pegged to stock performance and would mean any decision they made would be to the benefit of themselves (agents) and principals (shareholders). Whilst in theory the concept was sound, it meant that Enron's management could now deceive the markets for their own monetary gain, and they did just that. Higher management decided to take on high debt and risky activities, leaving these transactions 'off the books' and essentially meaning Enron was falsifying information. Enron had reached the point where it was overstating profits by $1.2 billion and eventually lead to its collapse. In Enron's collapse it also took down its accounting counterpart firm, Arthur Andersen, who were certifying Enron's books to be clean, when they very obviously weren't. In the case of Arthur Andersen again reiterating the power of the principal-agent problem, where the accounting firm (principal) trusts and follows orders from the chiefs (agents), who benefit greatly from the business of a large company like Enron. The collapse of the two giants shook Wall street, and finance around the globe, leading to Enron's CEO Jeffrey Skilling being sentenced to serve 24 years in prison, as a result of various counts of conspiracy, fraud and insider trading. To this day, the Enron Scandal still remains as one of the key studies of the principal-agent problem. Another potential example of the agency-cost problem (which also gives rise to questions of corporate social responsibility) arose with respect to the James Hardie Scandal, where James Hardie Industires sought to avoid payment of settlements to those former employees suffering from by asbestos related illnesses. Ultimately, the shareholders were almost unanimous in voting in favor of a compensation scheme for the victims. The interests of the shareholders may have favored funding the compensation scheme earlier than the directors were willing to. This divergence in interest, even where it address an issue of corporate social responsibility rather than strictly monetary concerns, could be considered an example of agency cost. Further difficulties may arise where the interests of one shareholder conflicts with that of another. In the legal dispute Dodge v Ford Motor Co, Henry Ford sought to take Ford Motors in a direction that was disagreeable to the one of the minority shareholders, Mr Dodge. Mr Ford's