From the editor

Both the ability and fidelity of managers have long needed monitoring," so said Warren Buffett five years ago. As with most sage advice, we understand its true meaning only when we are hit by crisis. The implications of the financial fraud committed by Satyam Computer run deeper and wider than we have understood so far. It calls into question the very purpose of two institutions that are supposed to be watchdogs for good corporate conduct: independent directors and external auditors. Crores of shareholder money is spent on these directors and auditors-but to what avail? To quote Buffett again: "If able but greedy managers overreach and try to dip too deeply into the shareholders' pockets, directors must slap their hands. Overreaching has become common but few hands have been slapped."

In our cover package for this issue, we not only go into the details of the fraud and explore how and why Satyam Chairman B. Ramalinga Raju turned to the dark side, we also bring under the spotlight the role of auditors and directors. With the help of a few chartered accountants and corporate lawyers, we trawled through Satyam's balance sheets of the past five years to look for the murky trail and understand how the auditors and directors missed the signs of what now seems to be a blatant scam. A mustread in the package are the confessions of a few auditors, which prove how rampant financial irregularities have become. We also bring you the similarities- and the lack of it-between accounting frauds in the US and those in India. In covering stories like Satyam, we face an apparent disadvantage. Important developments can take place between the time we send the magazine to the press and you get your copy (a gap of 4-14 days). The challenge for us is to generate stories that clarify some of the most lingering doubts and answer the uppermost questions in your mind. We hope to have achieved that.

One sobering conclusion from the Satyam episode is that no matter how good the regulatory system may become, it can't always prevent frauds. The best antidote to frauds is good management. Let's hope the brightest executives of India Inc. understand this. We present one such list of hot and young (up to 40 years of age) executives in this issue. An annual feature with BT, this year's list is our tribute to some of the best minds in the industry who face the daunting task of steering their companies through one of the toughest times-and do so by not losing the balance between ability and fidelity.