The Satyam saga and Corporate Governance

[views_livemint]

The rapid fall from grace of Satyam Computer Services - one of India's foremost IT outsourcing companies has raised some important concerns around Corporate Governance. Satyam, which was the winner of the Golden Peacock Award for Corporate Governance for 2008, first grabbed headlines when it tried to acquire large chunks of Maytas Infrastructure

Comments

[essentialsaltes]

Ostensibly the independent directors are there to represent the interests of the shareholders, protecting them (for instance) from potentially selfish decisions made by the other directors.

In practice, particularly when ownership is concentrated, the directors serve practically at the whim of the owners, while the small shareholder has very little information about the directors and very little say in the matter even if they had information that suggested that a particular director was not truly independent.