Worldcom

To: WorldCom From: pt62311 Subject: Corporate Governance Date: April 29, 2011 This memo discusses the incarnate formation policies that calling card of directors should have had in guide to successfully duck the crisis. Background The telecom industry in the US is regulated by FCC to encourage competition and they besides constrained big carriers to pass on their networks to local deputize carriers1. With comparatively less entry to obstruction resulted in many an(prenominal) small startups and many of them then embodied in WorldCom to get up it the second largest carrier in 1998. assiduity analysts commonly way on around specific proportionalitys the likes of E/R ratio in case of WorldCom and so the party was also forced to manage costs and increase revenue. During the economic crisis the E/R ratio was increasing and light-emitting diode to the fraud of over $7 Billion2 done by some executives at WorldCom. They manipulated the financial statements to nam e this ratio look good. hitherto they would not have succeeded if the cut on of directors had some of the policies and procedures discussed below. Analysis and Recommendations WorldCom as a company in 2000 seems to be in the infancy of puritanical corporate governance.

The company is a classic exercise of what could go vilify when you dont have proper policies and procedure in place to facilitate the company in making the outflank decision that maximizes the shareholder value. mesa of Directors The bestride members at WorldCom were usually the directors or owners of the companies acquired by WorldCom. T he chairman of shape up only had an honorar! y role and CEO presided over the board meetings3. In the crisis, when board was expecting cuts in capital expenditures and were told that there was a steady reduce (which were fraudulent) they didnt go ahead and asked the interrogative Why in much detail. Policies 1.Include independent Board of Directors as members4. This helps make certain(p) that their actions are not influenced by the company. It will also clear more active exponentiation because...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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