The Satyam Fiasco - A Corporate Governance Disaster!
Department of Business and Economics, Monash University
Corporate Governance is becoming increasingly important for companies across the globe. With the number of companies failing and the increasing frequency by the day, the markets now feel the need for an express code stressing on good corporate governance. Corporate Governance depends on two main aspects, firstly, the commitment of the management towards integrity and good business decision making and secondly, it is up to the monitoring agencies to put in place a set of standard practices to ensure sufficient disclosure, clarity of decisions and ethical decision making for both family managed businesses and professionally managed businesses, likewise.
In this case study, we have taken up Satyam Computer Services Ltd, the fourth largest IT firm in India as a case sample and studied the failures of corporate governance at different layers which led to a collapse of this magnitude. Not only were there failures at the regulatory level, but also at the executive level. With no express code for corporate governance in India, the company failed to follow the industry standard best practices and as a result, collapsed. This study would be useful to students and regulators in identifying the different kind of failures in a family owned business like Satyam and to policy makers in designing and implementing corporate governance frameworks for professionally managed as well as family managed businesses like Satyam.
Number of Pages in PDF File: 10
Keywords: Satyam, Corporate Governance, Golden Peacock, Indian Enronworking papers series
Date posted: May 26, 2010 ; Last revised: November 2, 2010
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