The Crisis at Tyco - A Director's Perspective

Posted: 29 Jan 2012

See all articles by Suraj Srinivasan

Suraj Srinivasan

Harvard Business School

Aldo Sesia

Harvard Business School

Date Written: June 2, 2011

Abstract

In 2002, Wendy Lane had been a member of the board of directors at Tyco International a little more than a year when the company's CEO Dennis Kozlowski and other top executives were accused of fraud, which ultimately led to resignations, imprisonments, lawsuits, and SEC filings. In a short period of time Tyco lost 2/3rds of its market value. Many outside the company questioned the board's leadership and diligence. Lane, who had a successful career in investment banking before becoming a professional director, was caught in the firestorm. The case discusses the events that led to the crisis, her reflections on managing the crisis both personally and professionally, the reputational risk she encountered, and the lessons she learned as a director.

Learning Objective: The case allows members of boards of directors and audit committees to consider their role in providing oversight and the challenges they face while doing so. Using the case of an audit committee director at Tyco, the case discusses the reputational consequences and other personal and professional costs directors can experience when their companies fail.

Suggested Citation

Srinivasan, Suraj and Sesia, Aldo, The Crisis at Tyco - A Director's Perspective (June 2, 2011). Harvard Business School Accounting & Management Unit Case No. 111-035, Available at SSRN: https://ssrn.com/abstract=1993212

Suraj Srinivasan (Contact Author)

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=10700

Aldo Sesia

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-496-2085 (Phone)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,694
PlumX Metrics