Q7.In the light of the Satyam Scandal (2009), discuss the changes brought in corporate governance to ensure transparency and accountability.

The Satyam Scandal (2009) exposed profound failures in corporate governance, particularly in financial reporting, independent director oversight, and auditor efficacy. This necessitated comprehensive reforms to restore investor confidence.

Key Changes for Transparency and Accountability

• Companies Act, 2013, mandated independent directors with stricter appointment criteria, enhanced responsibilities, and liability, strengthening board oversight.
• SEBI LODR, 2015, reinforced board composition and approvals for related party transactions, demanding greater disclosures.
• Audit Committees were empowered with extensive oversight over financial reporting, internal controls, and auditor appointment/remuneration.
• Mandatory whistleblower policies and protection mechanisms were introduced to encourage reporting of unethical practices, ensuring accountability.
• Stricter disclosure norms for financial reporting and related party transactions significantly enhanced transparency.

These reforms have significantly bolstered corporate governance frameworks, fostering a culture of greater transparency and accountability, crucial for investor protection and market integrity.