Worldcom

WorldCom began in 2002 as the second largest longdistance U.S. telephone service provider with operations in 100 countries, 20 million customers, and assets of $107 billion. Seven months later, the company became the largest bankruptcy in U.S. corporate history as the result of a 5-year accounting fraud that totaled more than $11 billion. WorldCom experienced a breakdown of corporate governance. The CEO handpicked new board members, controlled the board's agenda, dictated policies, and enriched directors through generous consulting contracts, stock option distributions, and perks. Employees concerned about the fraud feared questioning executive authority and had no safe outlets to report the wrongdoing.