CORPORATE GOVERNANCE WINNER………Among the ranks of corporate train wrecks that littered the American landscape over the past decade, Tyco International Ltd., the $40-billion diversified manufacturing and services conglomerate, was one of the most grandiose in terms of its characters and simultaneously most mundane in its underlying crimes. Not only were the top executives–notably CEO Dennis Kozlowski and CFO Mark Swartz–found to have been guilty of shamelessly raiding the corporate coffer of more than $150 million for their own personal gain, the company's books and business were left tattered. In Kozlowski's last weeks and the month following his departure, between January to July 2002, the stock plunged from a near record high of $60 to a record low of $7. For the company's employees and shareholders and bondholders left holding company paper, that was only the half of it. Seemingly endless revelations–the purchase of a $6,000 shower curtain among the most memorable–of Kozlowski's excess continued to drag Tyco through the mud even as efforts began to salvage what was left.

But where many of its peers like Enron Corp. and Worldcom Inc. failed to survive their own accounting scandals and the criminal depredations by top executives, Tyco has not only rebounded financially–it has become something of a model corporate citizen, with a gleaming new governance ethos, admirable transparency, and an internal ethos that rewards honesty and openness and refuses to tolerate misbehavior or deception. It has been a dramatic turnaround, perhaps unique in recent corporate history in its thoroughness, speed and consistency.

"No other company we have followed has made such a leap," says Gavin Anderson, CEO of Governance Metrics International. GMI recently gave Tyco its highest rating (a 10), placing it among a top 20 of America's largest 1,800 public companies–alongside Procter & Gamble and Kimberly-Clark in corporate responsibility and transparency. Less than four years ago, in December 2002 when it wallowed with the likes of Enron and Worldcom, GMI had handed Tyco a grade of 1.5.