Business experts are pessimistic about how long Sidgmore will remain at WorldCom's helm. Sidgmore was one of the loudest telecommunications boosters throughout the 1990s and founder of UUNet, which built an enormous system of cables and electronic switches that allows access to Internet e-mail and Web pages. But his two months at the top of WorldCom may end in disaster. "The numbers are so big that it's going to be difficult to re-establish credibility. At the minimum, the entire top management team will have to be removed," said Richard A. D'Aveni, professor of strategic management at the Amos Tuck School of Business Administration at Dartmouth College in Hanover, N.H. "All of this happened on Sidgmore's watch, recently as CEO and before that as vice chairman. How can you trust somebody to watch now if it seems like he didn't watch before?".
Sector scandals The WorldCom scandal comes less than two weeks after the ouster of Qwest Communications International Chief Executive Joseph Nacchio, who resigned June 17 at the request of the beach day iphone case company's board, Denver-based Qwest is under SEC investigation of accounting practices and has been forced to put its assets up for sale, The company was criticized roundly for what some shareholders called Nacchio's "outrageous" compensation--$27 million last year, excluding stock options--even as the stock plummeted, The package was more than six times his $4.22 million pay in 2000..
D'Aveni said Sidgmore might have preserved some of his professional reputation by swiftly firing Chief Financial Officer Scott Sullivan after announcing the $3.8 billion error. The company also accepted Tuesday the resignation of David Myers, its senior vice president and controller. And Sidgmore's predecessor at the top of the company--the man Sidgmore described to journalists as a "good friend"--is also likely to come under fire. Ebbers, whose strategy of rampant acquisition led WorldCom into telecommunications' top ranks, left Sidgmore a company that was laboring under $30 billion in debt and was being investigated by federal securities regulators. WorldCom had lost more than 80 percent of its value when Sidgmore took over after several years in a low-profile role as vice chairman.
The idiosyncratic Ebbers, 60, also eroded trust in the company and its board of directors because of a personal loan from WorldCom for $366 million, And he greatly sapped morale among employees during a staff meeting in March, when according to media reports, he accused employees of stealing coffee bags from company break rooms, At the same meeting, he allegedly told workers that the Mississippi company would cut its costs by turning up office thermostats in the humid summer, Some business experts said shareholders or government regulators would be foolish to lay the lion's share of the blame in the WorldCom meltdown on Sidgmore or any single set of executives--even if several insiders are found to have intentionally beach day iphone case misled investors..
"The concern that I and other investors have about the Enrons, Global Crossings, Tycos and WorldComs, among others, is this: Where are the boards of directors of these corporations--the people who were supposed to be the watchdogs to make sure corporations are acting appropriately and that investors are getting accurate information about the companies' financial status?" Hoffman asked Wednesday. "We're dealing with a systemic failure where the whole barrel of apples is rotten--not just a few pieces of fruit," Hoffman said. "Millions of people are concerned whether we should keep our money in the stock market, and this could be the tip of the iceberg when it comes to consumer confidence in the stock market and in corporate governance.".