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WorldCom Warnings


The College of Business at East Carolina University welcomed famed WorldCom whistleblower Cynthia Cooper as part of the Cunanan Leadership Speaker Series on January 17.

The Cunanan Leadership Speaker Series brings distinguished leaders to Greenville, representing for-profit and nonprofit firms, entrepreneurial activities, government, and public affairs. Topics highlight leadership, professional development, ethics, and the role of business in modern society.

Cooper spoke to an overflow audience about the role of ethics in business, and used her experience in uncovering corporate fraud at WorldCom—to date the largest corporate fraud in history—to explain what can happen when ethics are ignored.

Dr. Frederick Niswander, dean of the College of Business, said, “Ms. Cooper speaks on ethics and leadership from a very personal perspective, and we believe her presentation will help attendees recognize the impact that a single person may have on the members of his or her community.”

Cooper’s personal story illustrated the ease with which regular people can become caught up in illegal activity when they allow their personal ethics to be compromised. She urged the many students in the audience to recognize when they are faced with ethical dilemmas in their daily lives.

“Start thinking about the decisions you make,” she said.

In explaining the fraud at WorldCom, particularly how so many otherwise honest and law-abiding people colluded to perpetrate the crime, Cooper referenced a psychological experiment conducted in 1961 by Stanley Milgram. This study measured the willingness of a person to obey an authority figure, even when that authority figure instructed them to perform an act that was contrary to their conscience. Milgram’s study showed that when enough pressure was applied to ordinary people, they would commit acts they believed to be wrong.

In WorldCom’s case, lower-level accountants were pressured into entering fraudulent data into the accounting system by their superiors. Cooper read one accountant’s actual resignation letter, which clearly stated his objections to what he was being asked to do. In the end, however, he never sent the letter and continued to follow the orders he was given.

Cooper stressed the importance of perspective in dealing with ethical dilemmas. “Pressure can affect decisions,” she said. “Take a step back and evaluate the situation.” She also warned students of the dangers of becoming complacent and provided tips for making ethical decisions such as remembering that just because something is legal does not always mean that it is ethical, and that “I was just following orders” does not hold up in court. But most important, is making sure that one’s moral compass is pointed in the right direction.

“I challenge you to draw clear ethical boundaries today,” she said.

In recognition of her courage in uncovering the fraud at WorldCom, Cooper was named one of Time magazine’s 2002 Persons of the Year. Currently, she is president of a firm that provides consulting and training in internal audit, internal controls, governance, and ethics. As a result of the scandals at WorldCom—as well as Enron, Tyco International, and Adelphia—new laws and regulations were introduced to prevent similar accounting fraud, and to protect shareholders.

“The world is fundamentally different because of what she did,” said Niswander.

The Cunanan Leadership Speaker Series was established thanks to a gift from Steve and Ellen Cunanan of Richboro, Pennsylvania. Matching funds were provided by the Johnson & Johnson Foundation.

“The Cunanans have a clear understanding of the importance of leadership in modern business and society. Their generous support will enable ECU students and the Greenville community to learn from some of our nation’s most successful leaders,” said Niswander.

The next speaker in the Cunanan Leadership Speaker Series will be former IBM diversity executive Ted Childs on March 19, 2008.

01-17-08