Atim Kabra

Improving Corporate Governance: A Blueprint to Prevent Scams Like Satyam's

I agree copperbaron. I have been on Boards of both US and Indian companies and what i have seen is not much different in either of these places.

I think we have to break the nexus between who appoints the watchdogs and who gets watched over...

As long as the auditor, independent director, the investment bank or the rating agency knows that their fees from current assignment, other assignments from the same client and their future renewal of the contract depends on their ability to 'please' the management while doing their job supposedly, we are walking very treacherous grounds.

Let us see what changes the collective outcry produces or whether it is back to regular business.


On Jan 27 09:19 PM copperbaron wrote:

> Atim,
>
> Good article. We definitely need to get much tougher scrutiny of
> the companies and banks that employ our capital and ask for our trust.
>
>
> Everybody knows that auditing is sort of a joke, a smokescreen to
> assure investors that the 'books have been scrubbed' and that they
> can sleep at night, knowing their investment is safe.
>
> Unfortunately, there are many crooks about, and often the investor
> is not kept abreast of what is really happening at the company.
>
>
> I agree with rotating auditors, having them assigned and paid by
> an independent audit board, and making them more accountable for
> good performance rather than the song and dance that "auditing" has
> become in the U.S. at least. I can't imagine it's any better in India,
> but if it is, good. But auditing is not enough, unfortunately.<br/&...
>
> It is not that hard to have good, sharp investigators go into a public
> company unannounced at random times during the year, to spot-check
> such things as bank transfers, suspicious transactions, insider self-dealing,
> options abuses, and the like.
>
> But above all, we should have very tough and vigorous prosecution
> of corporate wrongdoers. The Bernie Ebbers types, the Andy Fastows
> and Jeff Skillings, Dennis K, etc. - these are all terrible crooks
> and they deserve very tough sentences when caught and convicted.
> We get some, and some deplorable skanks like Scrushy get away with
> it - but prison time gets these jokers rattled like nothing else.
>
>
> Most high-level execs I know think audits are pretty much of a joke,
> and we have proven to them time and again that they are right!