India's corporate governance 'improving'

8 February 2010

Corporate governance standards in India are gradually improving in the wake of the Satyam scandal, an expert has claimed.

Writing in the Wall Street Journal, Arun Duggal described the incident of January 2009, when it emerged that the accounts of Satyam Computer Services had been falsified, as "a blot on the corporate governance system in India".

Often referred to as "India's Enron", the controversy forced Indian companies to urgently review their governance standards and ensure that all financial information recorded in their books can be independently verified as accurate.

Mr Duggal, who is a former chief executive of Bank of America in India, said that there has been a "steady improvement in the functioning of boards" since the scandal broke just over 12 months ago.

He cited a number of positive developments as a result of the Satyam case, with more time being devoted to the work of audit committees and the scrutiny of related-party transactions.

Meanwhile, independent directors are becoming more involved in monitoring the daily affairs of their companies and protecting the interests of minority shareholders.