Role of Directors
The Companies Acts in India has stringent corporate Governance requirements of Board members. Yet Raju was able to steer the Fabricated accounts through his board members for 6-years! This has Bewildered the Corporate sector and Regulators. At times, the company was holding excessive cash, as per the books. This should have invited questions by Board members. It is fair to expect independent directors, like Harvard Professor Krishna Palepu, the former non-executive director of Satyam, to be moral guardians of Corporate governance. The role of independent directors in accountability, transparency and governance is also determined by common sense and tradition. However, whilst Independent Directors should steer the company on the right path, ensure compliance, protect minority Shareholders, they principally depend on information furnished to them by auditors and Lawyers. It is unfair to expect independent directors, meeting monthly or quarterly, to be undercover detectives or CoPS!
Read more about this topic: Satyam Scandal
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