“It was like riding a tiger, not knowing how to get off without being eaten,” stated B. Ramalinga Raju, the Chief Executive Officer of Satyam Computer Services, in his letter to the Company's Board of Directors after he revealed significant material misstatements in their financial statements (Raju). Raju's statement illustrates the trap that top executives get into when they are trying to cover up a fraud. In situations like these, it is imperative to have a committed and independent board of directors that is dedicated to promoting good Corporate Governance. However, this needed foundation for good Corporate Governance was not in place at Satyam. The Satyam fraud case illustrates the growing disregard for Corporate Governance and how companies in rapidly emerging markets are pressured to continue their unattainable growth. This paper provides the principles for sound Corporate Governance, then enumerates the Corporate Governance failure at Satyam Computer Services, and concludes by providing suggestions for effective Corporate Governance.
