Corporate Governance Review of Satyam Computer Services
TABLE OF CONTENT
| Executive Summary | | | | | 3 | 1 | Introduction | | | | | | 4 | 2 | Corporate Governance-An Academic Review | | | 5 | | 2.1 | Corporate Governance Mechanisms | | | 5 | | 2.2 | Overview of the OECD Principles of Corporate Governance. | 6 | | 2.3 | Corporate Governance in India | | | | 7 | 3 | Satyam Computer Services Limited - Overview | | | 9 | | 3.1 | The Satyam Scandal | | | | | 10 | | 3.2 | Satyam's Corporate Governance Issues | | | 12 | 4 | Corporate Governance Recommendations-Satyam Compute Services Ltd. | 14 | 5 | Management Control System | | | | 16 | | Conclusion | | | | | | 18 | | References | | | | | | 19 | | | | | | | | | |
Executive Summary
This report examines the key issues in the corporate governance and management control systems of Satyam Computer Services Limited, an India based IT service provider, as of January 2009.
The report presents a detailed analysis of the company’s compliance with respect to its regulatory obligations and international corporate governance principles while reflecting on the scandal which questioned the company’s corporate integrity. Additionally, an overview of Satyam Management Control System and its need for restructuring is highlighted.
Conclusively, proposed changes within the overall company structure, within the context of international good practice, are recommended.
1. Introduction
Over the past decade, general concerns about the functioning of the corporate systems have been echoed due to the unexpected collapse of major companies. Criticism was further heightened with regard to the lack of effective board accountability, management control and companies’ corporate governance structure as a whole.
For these reason, and possible problems that could result from the separation of ownership and control, it was necessary for companies to intensify their corporate structures and mechanisms.
Corporate governance requires
| Executive Summary | | | | | 3 | 1 | Introduction | | | | | | 4 | 2 | Corporate Governance-An Academic Review | | | 5 | | 2.1 | Corporate Governance Mechanisms | | | 5 | | 2.2 | Overview of the OECD Principles of Corporate Governance. | 6 | | 2.3 | Corporate Governance in India | | | | 7 | 3 | Satyam Computer Services Limited - Overview | | | 9 | | 3.1 | The Satyam Scandal | | | | | 10 | | 3.2 | Satyam's Corporate Governance Issues | | | 12 | 4 | Corporate Governance Recommendations-Satyam Compute Services Ltd. | 14 | 5 | Management Control System | | | | 16 | | Conclusion | | | | | | 18 | | References | | | | | | 19 | | | | | | | | | |
Executive Summary
This report examines the key issues in the corporate governance and management control systems of Satyam Computer Services Limited, an India based IT service provider, as of January 2009.
The report presents a detailed analysis of the company’s compliance with respect to its regulatory obligations and international corporate governance principles while reflecting on the scandal which questioned the company’s corporate integrity. Additionally, an overview of Satyam Management Control System and its need for restructuring is highlighted.
Conclusively, proposed changes within the overall company structure, within the context of international good practice, are recommended.
1. Introduction
Over the past decade, general concerns about the functioning of the corporate systems have been echoed due to the unexpected collapse of major companies. Criticism was further heightened with regard to the lack of effective board accountability, management control and companies’ corporate governance structure as a whole.
For these reason, and possible problems that could result from the separation of ownership and control, it was necessary for companies to intensify their corporate structures and mechanisms.
Corporate governance requires
References: A Study on the Corporate Governance Issues at Satyam (n.d.). Retrieved 28 April 2010, from: http://www.scribd.com/doc/28250495/A-Study-on-the-Corporate-Governance-Issues-at-SATYAM INFO-TECH (2008). Satyam Directors Remuneration. Retrieved 30 May 2010 from: www.accessmylibrary.com/coms2/summary_0286-3622943_ITM Mahapatra, B., Sahu, T. and Tarai, S. (2009). Financial Analysis of Satyam Computers. Retrieved 5 May 2010, from: http://www.scribd.com/doc/18059531/Financial-Analysis-of-Satyam-Computers-Copy-2 NationMaster-Encyclopedia (2003-5). Satyam Computer Services Ltd. Retrieved 5 May 2010, from: http://www.nationmaster.com/encyclopedia/Satyam-Computer-Services-Ltd. OECD (2004). Principles of Corporate Governance [Electronic Version]. Retrieved 27 April 2010, from: http://www.oecd.org/dataoecd/32/18/31557724.pdf OECD (2003). White Paper on Corporate Governance in Asia [Electronic Version]. Retrieved 27 April 2010, from http://www.oecd.org/dataoecd/4/12/2956774.pdf Raju, B. R. (2009). Resignation Letter [Electronic Version]. Retrieved 18 May 2010, from: https://victory.port.ac.uk/webct/urw/lc5116011.tp0/cobaltMainFrame.dowebct SEBI Committee (2003). Report of the SEBI Committee on Corporate Governance [Electronic Version]. Retrieved 12 May 2010, from: http://www.nfcgindia.org/library/narayanamurthy2003.pdf