Corporate Governance: the WorldCom Scandal

Corporate Governance: the WorldCom ScandalWORLDCOMHistorical background:Worldcom

The story of WORLDCOM began in 1983 when businessmen Murray Waldron and William Rector sketched out a plan to create a long-distance telephone service provider on a napkin in a coffee shop in Hattiesburg, miss.That meeting at the days inn in Hattiesburg has entered financial folklore and been given a ROMANTIC TINGE, then, LONG DISTANCE DISCOUNT SERVICES, was suggested by the waitress.Early investor Bernard Ebbers became the chief executive officer on 1985.Merged with Advantage Companies Inc. in 1989.

Historical background: worldcom

LDDS merges in an all-stock deal with discount long distance service provider Advanced Telecommunications Corp on 1992.LDDS acquires long distance providers Resurgens Communications Group Inc and Metromedia Communications Corp. in a three-way stock and cash transaction that creates the fourth-largest long-distance network in the United States during 1993.LDDS acquires domestic and international communications network IDB Communications Group Inc. in an all-stock deal on 1994.LDDS acquires voice and data transmission company Williams Telecommunications Group Inc. for $2.5 billion and changes its name to WorldCom Inc. on 1995.

worldcom?Clinton, Mississippi-based Telecommunications heavyweightOperating the second largest long-distance calling business in the US One of the world's biggest 'backbone' networks for internet traffic and electronic commerce. It has more than 85,000 employees and had 2001 sales of $35.2 billion.

worldcom?Operations in more than 65 countries across the globe with a network stretching 93,000 miles. Provides internet access for more than 100 countries .Owns some of the original pioneering internet firms - UUNET, MCI and CompuServe - who created the first email services in the late 1970s.

servicesBrand communicationManagement consultingCrisis and issues management

partnersA-World Consulting LimitedCookerly Public RelationsCorporate Ink Integrated Marketing and PR

industriesConsumer Products & ElectronicsAutomotive & TransportationAgriculture

Worldcom at a glance

Bernie Ebbers

Education and degreesBachelor in Physical Education, minor in secondary education, Mississippi college (1967)Honorary doctor of laws, Mississippi college (1992)Honorary doctorate, Tougaloo college (1998)

Bernie Ebbers

Business AchievementsHe discovered a tiny telephone company in Clinton, Mississippi.Long Distance Discount Services (1985)Built the company through more than 60 acquisitions. The company was formed in the early 1990s as a result of a merger between long distance discount service, MFS communications and UUNET. In 1998, it got into a $37-billion merger with MCI.

Bernie Ebbers

Other activitiesHe served as chairman of the board of directors of the competitive telecommunications association from 1993 through 1995. In 1997 he then became the chair for Mississippi college's new dawn campaign, a fund raising effort initially intended to provide $80 million that raised its goal to $100 million. In July 2001, Ebbers was proposed as the chair for the president's national security telecommunications advisory committee.

Mci worldcomWorldcom and MCI communications announced their US$37 billion merger to form MCI Worldcom on November 4, 1997Sprint Corporation and MCI WorldCom announced a $129 billion merger on October 5, 1999.