Amity Business SchoolCorporate Governance Failure At Satyam

By:Ambuj PandeyDeepak KumarKunal Sharma

Nirupam NishantRohit 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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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 company’s 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.

• Proper hierarchy should be maintained.

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Amity Business School