In January 2009 the chairman of Satyam computer services publicly announced that the company’s accounts had been falsified.
The case has since come to be known as ‘India’s Enron’ – ironically, Satyam means 'truthful' in Sanskrit – and it’s just one of several instances that has shone a spotlight on India’s corporate governance.
In his paper, ‘Evolution of corporate governance in India,’ released March 11, Dr. Uday Salunke, director of the Welingkar Institute of Management observes:
‘India needs a market driven corporate governance culture with greater participation from Indian retail investors, either directly or through mutual funds; entry of government pension funds into the equity market in a really competitive mode, with checks, balances and transparency in line with the Norwegian sovereign fund's high standards of corporate governance and a close, alert regulatory oversight to ensure compliance with the well-drafted codes and clauses. Corporate governance goes beyond crises, committees and compliances.
The corporate board reflects the spirit of corporate governance of a company. To understand the corporate governance of a country it is imperative to understand the framework of its corporate boards.’
Salunke further stresses the importance of having a ‘market driven corporate governance culture’ that calls for more participation from Indian retail investors either directly or via mutual fund. That, he says, will result in the entry of government pension funds.
