Corporate Governance Failure At Satyam

Amity Business School

By:
Ambuj Pandey Deepak Kumar Kunal Sharma Nirupam Nishant Rohit Mishra Utkarsh Sahu

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Discuss the leadership role of Mr.Ramalinga Raju Risk Taker Visionary Enthusiastic Confident Quick Decision Maker Willingness to take Responsibility

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Discuss the reason behind the corporate governance failure at Satyam.

The ownership structure: Satyam was fully controlled by Mr. Raju and his family So there was no transparency in the working of the company. The structure of company boards : As
Satyam has been started by his family member and him. So it had more family members than outsiders.

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The Financial Structure: The all the major work and dealing were done by Raju So the shareholder or directors are not well informed about the same. The Institutional Environment: As Mr. Raju had contacts in all department of the government and had provide help to the government in building the state. So Government and other agencies overlooked his work.

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So from the above points we can understand that Raju has full control of the companies internal and external environment and because of which Mr. Raju could commit such has huge scam and it was complete failure of corporate Governance.

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Examine the role of independent and non executive directors. Monish Chatrath the entire process for recruiting and identifying and nominating the directors needed careful introspection. Richard rekhy (CO- KPMG) He stated about the corporate governance which included board meetings, code of conduct, business ethic, etc that I had some flaws in it.

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The media and shareholders blames satyam boards for agreeing to maytas transcation. It was also stated that the independent directors were not capable of showing a clear picture of companies financial affairs. Dreak Higgs stated that there is a need of sound judgment for the board of Satyam

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Are there any lessons to be learned from the case for the future prospectus of corporate governance?

The Company need to strictly follow a proper system of corporate governance Failure in corporate governance severely impacts all the stakeholders and the companys reputation. Rotating the auditors for every couple of years. The policy followed by satyam was not transparent so there has to be transparency in the system.

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