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.

Describing the Satyam episode as an eye-opener, Mehra said that after Jan 7, when Satyam's founder and disgraced chairman B. Ramalinga Raju confessed to a Rs.78-billion ($1.43 billion) accounting fraud, it was the small investor who had lost the most.

'India can't take a backseat in corporate governance because the future belongs to India. 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.

'There are several lessons to be learnt from Satyam. It opened our eyes. It showed how a great company can also be brought down if somebody decides he does not want to be ethical for some reason. India has been able to control all that. India has put the culprit behind bars. The company is now making money.'

Referring to the role of independent directors in the light of the Satyam scam, Mehra said there was no need for them. 'We need directors with independent minds. We need independent boards. The independent directors are not bothered about anything as long as they get salaries. That is why it (Satyam fraud) happened.'

Elaborating, he said: 'There are people who are directors of 15 companies. How can you be an independent director of 15 companies? People have not been able to understand the role of corporate governance.'