CLINTON, MS: WorldCom has retained APCO Worldwide as it copes with the fallout of its disclosure that $3.8 billion in expenses had been improperly reported.
Since the scandal was made public, the company's message has focused on demonstrating its full cooperation with the authorities.
A little more than a week before the news broke, CEO John Sidgmore told shareholders the company was embracing a new commitment to communications.
WorldCom had been plagued by growing debts and a stock price that has plunged from around $62 in April 1999 to $1.42 at press time.
APCO had already been in talks with WorldCom about its new PR strategy prior to the crisis. "The commitment initially was to being forthright, open and honest, said APCO CEO Margery Kraus. "That commitment has certainly increased because that is an important way for the company to operate."
Kraus explained that the company's task now is to be forthcoming with investigators, and to continue moving the business forward, while emphasizing that its current woes were the responsibility of the prior management team, led by former CEO Bernard Ebbers.
"It's a new person running the company, and his way of running it is to let people know what he knows, when he knows it, she said. "He wasn't CEO when these problems occurred, and he needs to be able to communicate his vision on how he plans to take it forward. Operating in an open fashion is part of that."
On July 2, the day after the accounting revelation, Sidgmore answered questions at a press conference at the National Press Club. WorldCom has also released a letter from Sidgmore to President Bush.
"Seven weeks ago, as I assumed the position of CEO of WorldCom, Bert Roberts, our chairman, and I pledged to restore trust in this great company, it read. "However, part of restoring trust means being straight about problems as we discover them - and aggressively solving them. This is the only way we will rebuild our company's credibility. You have our commitment that we will continue to do this."
WorldCom's recent annual meeting included a discussion of how the company would improve its PR strategy. "The company's been through this PR nightmare, Sidgmore told a group of 500 shareholders at the June 14 meeting. "We have begun to institute a number of things that I believe will restore public confidence."
He said that he and other key executives have been talking to employees about their concerns, and that they planned a major customer tour and investment road show within the next few weeks. However, one of the senior executives he was referring to was CFO Scott Sullivan, who was fired after the accounting problems came to light.
See Editorial, p. 8, and next week's feature.