Case Study: Tyco International: Leadership Crisis

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Case Study: Tyco International: Leadership Crisis

Case Study: Tyco International: Leadership Crisis
Gupta Bhagirath, BUS604
Grand Canyon University


Tyco International Ltd. NYSE: TYC is a highly diversified global manufacturing company incorporated in Switzerland, with United States operational headquarters in Princeton, New Jersey (Tyco International (US) Inc.). Tyco International is composed of five major business segments: ADT Worldwide, Fire Protection Services, Safety Products, Flow Control and Electrical and Metal Products. This case study describes the Leadership crisis faced by Tyco International and its rebuilding an empire again.
In 2001, Dennis Kozlowski, chairman and CEO of Tyco International, was identified by
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The Act made securities fraud a criminal offense and stiffened penalties for corporate fraud. Additionally, it created an accounting oversight board that requires corporation to establish a code of ethics for financial reporting and to develop greater transparency in financial reports to investors and other interested parties. Much of what occurred at Tyco took place because the CEO was allowed/permitted too much power and was not required to be accountable. The Act also requires top executives to sign off on their firms’ financial reports, and they risk fines and long prison sentences if the misrepresent their companies’ financial position. Finally, the Act requires company executives to disclose stock sales immediately and prohibits companies from giving loans to top managers.

7. Can the SEC trust Tyco’s new board?
Tyco International’s Board of Directors is responsible for directing, and providing oversight of, the management of Tyco’s business in the best interests of the shareholders and consistent with good corporate citizenship. In carrying out its responsibilities, the board selects and monitors top management, provides oversight for financial reporting and legal compliance, determines Tyco’s governance principles and implements its governance policies. The board, together with management, is responsible for establishing the firm’s operating values and code of conduct and for

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