Case Name :      Governance Failure at Satyam

Authors :           Ajai Gaur, Nisha Kohli

Source :             Ivey Publishing

Case ID :            W11095

Discipline :        General Management

Case Length :    14 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

An unrelated acquisition decision by Satyam Corporation created discontent among shareholders and lead to a series of investigations. The investigations revealed a fraud of about INR 50 billion. This led to resignations by several board members and the CEO. The entire 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 in detail. 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 also provides an opportunity to discuss the measures that should be taken by regulators, auditors and other bodies to prevent such frauds.This case can be used in an undergraduate, MBA and executive development program to highlight following issues: 1) Ethics and corporate governance: This case can be used to discuss the effectiveness of current corporate governance regulations and how can they be made more effective. 2) Organizational culture and values: Corporate governance mechanisms, such as ownership structure, board composition and stakeholder influence, determine the organizational culture and values. Smaller firms inherit the corporate values from their founders. In larger companies, managers and board members play a pivotal role in shaping the corporate values. This case can be used to discuss the factors affecting development of corporate values.