Governance Failure at Satyam
(7 pages of text)
Case (Pub Mat)
An acquisition decision by Satyam Corporation created discontent among shareholders and led to a series of investigations that revealed fraud of about INR 50 billion, leading to resignations by several board members and the CEO. This episode became a mockery of corporate governance practices, raising questions about the efficacy of well-accepted governance norms.
This case covers the events that led to the failure of Satyam. The roles of not only the “promoter” but also other parties, such as the managers, board of directors, auditors and bankers, are discussed in detail. The case draws attention to various corporate governance and ethical issues and provides an opportunity to discuss measures that should be taken by regulators, auditors, and other bodies to prevent fraud.
This case can be used in an undergraduate, MBA, or executive development program to highlight the following issues:
- Ethics and corporate governance: This case can be used to discuss the effectiveness of current corporate governance regulations and how they can be made more effective.
- Organizational culture and values: Corporate governance mechanisms, such as ownership structure, board composition and stakeholder influence, determine organizational culture and values.
Smaller firms inherit corporate values from their founders. In larger companies, managers and board members play a pivotal role in shaping corporate values. This case can be used to discuss the factors affecting the development of corporate values.
Information, Media & Telecommunications
Hyderabad, India, Large, 2008
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