The Satyam controversy has come as a rude shock and is going to have a larger impact on India Inc. The roles of independent directors, the external auditing agencies and the regulatory mechanisms will undergo major upheaval.

This was the verdict that emerged at a congregation of human resource and business experts at the three-day Nirma International Conference on Management (NICOM 2009), which started here on Thursday.

Dalit Mirchandani, chairman, Ingersol Rand, India, who was the chief guest, said: The Statutory Audit Committee in every company relies solely on the audit report. It is surprising how a fraud of this magnitude escaped at least three filters.

He elaborated on such frauds being related to issues of corporate governance in India, as the majority of businesses here are family-run. Unless the Indian corporates learn to attract and retain the best of talent, my advice to them is always to exit from business, Mirchandani added.

Endorsing this, Prof Allan Cohen, former Harvard professor and co-founder of the Indian Institute of Management, Ahmedabad, said: The situation in the west is the same. Although on the face of it, the hierarchy may appear neutral, the underlining issues dont differ much.

Another issue that the delegates at the NICOM, which aims for Strategic Human Resource Management and Entrepreneurship in the Changing Business Scenario, discussed was the ailing Small and Medium Enterprises (SMEs) in Gujarat.

Suggesting a three-pronged strategy to tackle such problems, Mirchandani said: All stakeholders in the SME sector must develop a future organisational model for growth; attract and manage human talent; and must learn risk mitigation while enhancing the spirit of entrepreneurship.