Corporate Governance at Satyam: The Satyam Scandal

Satyam's board of directors is mainly composed of "friendly" directors who can not question the decision used by the manager. They can not act not only in management, but also when they face serious financial difficulties. Six of the nine directors are "independent" directors. These independent directors apparently did not act for the benefit of shareholders and other stakeholders even if it is clear that there is injustice within the company.

Well, in the second part of this article we will provide insight to prevent this type of fraud in the future. After the Satyam incident, Indian regulators began working on improving corporate governance in India. The Indian Securities and Exchange Commission (SEBI) is the main regulatory authority of the Indian stock market (Afsharipour, 2009). It suggests some regulations that all companies strictly obey to maintain good governance standards. However, it is still difficult for Indian enterprise government to change standards in a short time to prevent further fraud. However, it can be achieved by promoting strict implementation of that rule.

Because India is on a growth trajectory and has the ambition to rank in the counters of developed countries, the problem of corporate governance only surfaced after the Satyam fraud, which is a serious problem. It may be argued that Satyan fraud is an isolated case in Indian companies, but it is more important to understand how other countries in the world appreciate the serious attitude towards corporate governance ethics . Do we take seriously the ethical view of corporate governance from its decorative value and moving toward the main purpose of corporate governance terminology? For the most part, this approach is to decorate the board of directors, which is a matter of corporate governance, and the founder of the company believes that this will add some decorative value to the company. Sponsor repeatedly introduces known people to the board of directors. Nonetheless, the company prefers the decorative value of the board over its utility.