Edward D. Breen tried to convene a senior staff meeting at Tyco International Ltd. when he arrived just after 7 a.m. on July 29, 2002, his first day as chairman and chief executive of the embattled industrial conglomerate.

But "there was nobody to have a meeting with," recollects the 47-year-old Mr. Breen, who had been president of Motorola Inc. Some executives had quit following the departure of his predecessor, L. Dennis Kozlowski, who resigned just before he was indicted on charges of sales-tax evasion. Other staffers didn't begin work until eight.

A short while later, investors holding more than 15% of Tyco's shares showed up unexpectedly, demanding that Mr. Breen replace the entire board. "Oh, this is going to be real good," Mr. Breen told himself wryly.

Many executives have taken command of companies needing repair, but few have tried to fix a business like Tyco, which was being run, according to prosecutors, as a "criminal enterprise." Soon after Mr. Breen arrived, Mr. Kozlowski and another former top executive were accused of looting the Bermuda-registered company of nearly $600 million. (They have pleaded not guilty.) Tyco was also in the midst of a liquidity crisis, with big debt repayments due within months.

Though he navigated Tyco's debt crisis, Mr. Breen has come under criticism for moving too slowly to clean up the company's accounting mess. Last week, his first anniversary as CEO, Tyco disclosed it had restated results going back to 1998 after initially saying that no restatements would be needed. The company's stock price has risen 49% on the New York Stock Exchange, from $12.03 the last trading day before Mr. Breen started work at Tyco, to $17.95 as of Aug. 5.

How does a new leader of a badly battered business go about trying to clean house, restore workers' morale and win back investors' trust? Recently, Mr. Breen discussed his tumultuous first year. Here are excerpts:

Wall Street Journal: When you arrived, what made you so sure Tyco was going to survive? Numerous scandal-tarred companies have filed for bankruptcy.

Mr. Breen: We are pretty much the only company that didn't go into prepackaged bankruptcy to fix its problems. That process is quick. The way we are doing it is more cumbersome.

Mr. Breen: A few people did some things that were pretty horrendous, but it had not affected the operations. It did affect the company and its reputation.

Mr. Breen: One of the strongest messages was we changed the whole board. We changed the corporate management team. There is nobody on this floor, except the one woman at the front desk, who was here when I arrived. And we changed some operating people because they weren't going to cut it long term.

I said to employees, "I don't want to see the foul line. I want to be way back from it." Usually you are allowed to get close. We put the ombudsman role in. We have our head of corporate governance. We have hot lines. We set a different tone as to how the company is going to be run.

We are setting up a kind of regimented operating system, which it never had. The company never had a strategy-setting process. We now review that with our board.

Mr. Breen: The process we went through takes time. You have to be thorough and you have to go through all the steps.

When I got here, we were in the middle of phase one, which culminated in the 8-K regulatory filing that disclosed most issues with Dennis and Mark. (Editor's note: Tyco divided an internal investigation led by outside attorney David Boies into two phases. The first primarily looked at alleged improprieties by Mr. Kozlowski and Mark Swartz, Tyco's former finance chief. The second, finished last December, examined past accounting practices and found a pattern of aggressive accounting but no "systemic fraud.")

Then I asked that accounting be looked at. The Boies report said controls and policies were weak in parts of the company, the biggest being fire and security [services]. That's why we said we are going to continue to audit aggressively.

Mr. Breen: That's the way I felt. But what this company did to audit itself was pretty unprecedented.

Mr. Breen: Absolutely. Investors said to me: "Ed, investigate, look at the past, disclose it -- and move on."

Mr. Breen: Though we didn't have systemic accounting problems, that didn't mean we had found every issue at that point.

Monday-morning quarterbacking, I wish we had found the other issues sooner rather than later. We had an eight-month process, which was a pretty quick process.

Mr. Breen: Coming into these situations, you are going to make a lot of management changes. The sooner you move the better.

I asked Mark Swartz to leave my second day, although he hung around a few weeks. I got rid of everybody else within 60 days.

[But] you don't hire people that quick. I couldn't walk down the hall and have a conversation with the legal department. There was no legal department here in New York. Investor relations was me.

In those situations, you bring in a lot of outside help and they become part of your team until you bring in your own. They kind of became our crisis-management team.

Mr. Breen: Could we have moved a little faster on that? Yes, we probably could have.

Mr. Breen: It will be a matter for review. I said that at our annual meeting. The new board was just stepping in. We had a bunch of issues we needed the new board to address.

We told Pricewaterhouse that we are going to look at the issue every year.

Mr. Breen: I am, because we have a new team in place. These are some of the most senior engagement partners.

And we said, "Look, we are in conversation with the SEC. There might be a restatement. We don't think there needs to be, but there could be a restatement."

Mr. Breen: I never say you've found every last little thing, but I feel pretty good that we are at the end of it.

Mr. Breen: You have to stay very balanced. Stick with your priorities and don't get derailed. If you do that, the stuff swirling around isn't quite as important. It keeps you balanced if you can say, "Here is what we are getting done. We are moving down the field in the right direction."

But we have a lot of issues in front of us still. We have to prove to the world that we are going to run a great company operationally and generate a lot of cash and grow earnings consistently.

Mr. Breen: Do your homework well.

I did a ton of due diligence with the auditors, people in the company, the board. One of the things that I liked about Tyco -- and studied hard before coming in -- was its ability to generate cash. The company had great businesses. They were in the right sectors. The foundation was very strong.

The biggest issues were under the corporate governance umbrella: rebuilding the board and the management team, and rebuilding trust in the company.

Leadership starts at the top. It wasn't that we didn't have some very good board members. But confidence in the marketplace was lost. We have made probably 20 to 30 moves on the corporate governance front.

The second big issue, and I knew this coming in, was a short-term liquidity problem. I needed to address that.

The third thing was the morale of the employee base. With 260,000 employees, there are really a million people living off Tyco. Building trust in the new management team, where we are headed and how am I going to run this place was a huge task.

You have to put yourself in the shoes of an employee who is not close to the fire. They only know a fraction of what I know. Their tendency is to worry more. Communication with them was top, top priority.

Mr. Breen: You have to. When you are in crisis, you have to show confidence to people. They are reading everything. Your body language. The grin on your face.

Mr. Breen: I viewed it a little differently. With a manufacturing background, I felt very comfortable that I would have a big impact on the company.

Mr. Breen: I don't think that process ever ends.