The One-Tel Collapse: Lessons for Corporate Governance
Griffith University - Griffith Business School
May 31, 2010
Australian Accounting Review, December 2011
One-Tel was a major corporate collapse in Australia in 2001. At the time of its collapse, it was the fourth largest telecommunications company in Australia with more than two million customers and operations in eight countries. Analyses of quantitative and qualitative data from diverse sources suggest that One-Tel’s collapse is a classic case of failed expectations, strategic mistakes, wrong pricing policy, and unbridled growth. The company’s meteoric rise and fall was associated with serious deficiencies in its corporate governance including weaknesses in internal control, financial reporting, audit quality, board’s scrutiny of management, management communication with the board, and poor executive pay-to-performance link. Thus, the collapse of One-Tel has several important lessons on the role of corporate governance in preventing corporate collapse.
Number of Pages in PDF File: 32
Keywords: corporate collapse, corporate governance, One-Tel, Australia
JEL Classification: M41Accepted Paper Series
Date posted: September 20, 2011 ; Last revised: October 5, 2011
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