The board of directors of Satyam Computer Services Ltd is due to get together on 10 January for a meeting that has the potential to undo old mistakes as well as be a trailblazer for corporate governance in India.
The software services company had decided to spend $1.6 billion (Rs7,664 crore) to buy two struggling firms that were promoted by the family of Satyam chairman Ramalinga Raju. The deal clearly hurts the interests of other shareholders, who dumped Satyam shares in protest.
The company chairman had clearly misused his position, while the board had not done its fiduciary duty of protecting investors. One independent director has already owned moral responsibility for the fiasco and resigned.
Another independent director, Vinod Dham, says the board will consider tough options such as forcing Raju to step down, hiring an external CEO and seeking a takeover by another company.
We hope independent directors in other firms also start taking their jobs more seriously. Too many are asleep at the wheel.