Satyam Crisis Sharpens Focus on Governance

Lora Bentley

The Satyam debacle has drawn the importance of corporate governance into sharper focus in India, according to this Livemint.com piece. Observers are asking whether corporate boards need to include more independent directors who are rigorously screened for experience and training. Should those directors then report more often to external investors? What about separating the CEO and chairman roles?

 

Writer Colin Mayer says many companies, in India and elsewhere, have taken these approaches. Unfortunately, they haven't prevented everything. The Madoff scandal happened after Sarbanes-Oxley was supposed to have plugged perceived loopholes. Independent directors don't help much when a dominant CEO expects support and cooperation from his or her non-executive board members.

 

Good governance is about more than how the board is composed, Mayer says. Governance requires more direct involvement from investors. He suggests that shareholder activism may be a viable alternative to tweaking a board's makeup.



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Feb 23, 2009 11:53 AM tej singh choudhary bafna tej singh choudhary bafna  says:

it is good that for satyam high level enq. will investigate. in india from village to metro all places so many economical scandles r always there. our agencies r not taking intrest to find out n action in time, so many peoples r facing troubles which never comes in news. when drop by drop water goes out pot becomes empty.our public still is very innocent n persons those who wants money by illegal ways very eassy for them.no one is working to make aware them for not to go for any scheme unless not well known.forget to get eassy money.earn n live in that with good plan on needs only.

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