Corporate Governance Failure At Satyam

Group -2
Devendra Tayade - PhD/15/18/O
Harish Rathod - PGP/25/146
Navya Mohanka - PGP/25/157
Paramita Turung - PGP/25/159
Prachi - PGP/25/164
Shivam Pandey - PGP/25/174
 Role of Independent Directors
The Indian Companies Act does not prescribe any qualifications or eligibility criteria for independent directors. Thus, as

a result many friends, relatives of promoters or owners make their way to as the directors. Thus giving rise to a
conflict of interest.

Independent directors or Independent Director acts as a guide, coach, and mentor to the Company. The role includes
improving corporate credibility and governance standards by working as a watchdog and help in managing risk.
Independent directors are responsible for ensuring better governance by actively involving in various committees set
up by the company.

Have adequate knowledge about the company and the external environment in which it operates.
Undertake appropriate induction and regularly update and refresh their skills, knowledge, and familiarity with the
company
Report matters concerning unethical behaviour, actual or suspected fraud or violation of the company’s code of
conduct or ethics policy.
Acting within his or her authority, assist in protecting the legitimate interests of the company, shareholders and
its employees.
Ascertain and ensure that the company has an adequate and functional vigil mechanism and to ensure that the
interests of a person who uses such mechanism are not prejudicially affected on account of such use.
Did members do Justice to their role?
In India companies didn't have a framework for independent directors and followed an arbitrary
process that lacked thoroughness.
Independent directors were considered "promoters' men".
This was compounded by the fact that approximately 90% of companies in India were , promoter-
run and their board members were picked by the promoter himself.
It's difficult to comment on the performance of Independent director but it appears that
independent directors, particularly those who were members of the audit committee failed to
apply due diligence.
It's not only in Satyam that the independent directors showed lack of commitment. Enron,
WorldCom and other companies in which Corporate governance failed because independent
directors failed to perform effectively.