India has a huge potential to involve retail investors in the stock markets but they are not coming out to invest because they have learnt a lesson from the Satyam Computer fraud, feels Madhav Mehra, president of the London-based World Council for Corporate Governance.
“The stock market participation of Indians is barely two per cent while in the US it is 45 per cent,” Mehra, on a visit here, said. “Indians have no problem with money. They are just holding it somewhere. They are not coming because they have learnt from Satyam,” he added.
Mehra said Indian companies need to set high standards in corporate governance. “Indian companies are not going for full disclosures. There is some requirement of the transactions of mergers, restructuring and acquisitions. People must know what a company is doing,” he said.
Referring to the role of independent directors, Mehra said there was no need for them. "We need directors with independent minds. The independent directors are not bothered about anything as long as they get salaries. There are people who are directors of 15 companies! People have not been able to understand the role of corporate governance."
Mehra also said the world over, it is young people who are driving companies. “We want diversity in board rooms,” he stressed.