The fraud at Satyam computer Services has been one of the biggest scam unearthed from the interior of corporate India and has impelled the system to stay alert. In order to avoid any such fraud carried away in the public sector entities, the Government has decided to train the directors of the public sector undertakings (PSUs).

More than 300 independent directors of over 200 PSUs are likely to receive the training from the Government. Officials say that the training is aimed at making them "ask the right questions at the right time".

The Department of Public Enterprises (DPE) is considering a proposal that will make it mandatory for all independent directors to take training from the Institute of Company Secretaries of India (ICSI). The training programme will deal directly deal with role and responsibilities of the directors. "Being independent and not employees of the company, they can serve the purpose of a vigilance audit and nip the problem in the bud," said a senior government officer.

Former CMD of Oriental Bank of Commerce, B D Narang said, "Most independent directors know absolutely nothing about accounting. PSUs have been sending them on training courses and there is improvement but they remain largely dependent on the information that the chartered accountants feed them."

"A large number of PSUs are listed on the stock exchange and have a direct impact on the shareholders' money. There is already an internal audit and vigilance system in place in most large organizations as tax payer's money is also involved in the functioning of the PSU," stated the government official.

The government seeks for more transparency, vigilance and audits at all the levels of the organization and therefore the training is being introduced.

The former CMD of Rashtriya Ispat Nigam Limited (RINL), Y Siva Sagar Rao said, "Most independent directors are actively involved in commercial decisions in my experience. They are aware of the financials but are not able to ask insightful questions though. However, in RINL, agenda was circulated 15 days before meetings, so ample time was given to them to be prepared for the meeting, which did help in the board meetings."

The former CMD of Canara Bank, MBN Rao extend the view that a lot depend on the selection of independent directors and therefore the management should play an active role in the process. "In my tenure as CMD of two banks, I came across highly informed set of independent directors, some of them hailing from the IITs," he added.

This training progamme is expected to increase the level of discipline in the industry.