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The One-Tel Collapse: Lessons for Corporate Governance

Australian Accounting Review, December 2011

32 Pages Posted: 20 Sep 2011 Last revised: 5 Oct 2011

Reza Monem

Griffith University - Griffith Business School

Date Written: May 31, 2010

Abstract

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.

Keywords: corporate collapse, corporate governance, One-Tel, Australia

JEL Classification: M41

Suggested Citation

Monem, Reza, The One-Tel Collapse: Lessons for Corporate Governance (May 31, 2010). Australian Accounting Review, December 2011. Available at SSRN: https://ssrn.com/abstract=1930730

Reza M. Monem (Contact Author)

Griffith University - Griffith Business School ( email )

170 Kessels Road
Brisbane, Nathan, QLD 4111
Australia

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