Much ink has been spilt, since the Enron scandal and the likes that followed it, on the various aspects and systems of corporate governance in general whether it be the US-UK type system with, a wide subscriber base and distributed holdings, or a Continental-Asian system where the bulk of the shares are usually owned by promoters and groups, without whom the company would mean nothing. 

This article seeks to focus the wide, all- encompassing corporate governance light into a focused beam, that discusses certain critical issues related to the Information Technology industry. 

Over the last several years, the IT industry has seen a double-digit growth and has been pivotal in the revival of our economy. In order to retain and enhance this growth, IT companies need to build on the confidence already gained from the world business community. 

Accountability is directly proportional to confidence, the more accountable the companies are, the more confidence the markets would have in them. 

Most of the work in the IT sector that lands on our shores comes from the US, where corporate governance has taken such prominence, that any laxity could lead to no business, a severely bruised reputation and even litigation. 

A recent case in the US described by the presiding judge as the "...epitome of corporate governance in the last decade of the twentieth  century", is an important example of the need for good corporate governance or the grave loss that can result due to a lack of it. 

In the case of X-IT vs Walter Kiddie Portable Equipment, the petitioners X-IT had developed unique equipment and the respondents were interested to acquire them. Eventually, the acquisition did not take place but the respondents allegedly copied the design of the petitioner's equipment. 

The petitioners sued for copyright infringement, misappropriation of trade secrets, breach of contract, unfair competition, tortuous interference with prospective business relations and unjust enrichment. 

The court held in favour of X-IT and granted an amount of US$ 3.1 million in compensatory damages and US$ 9.5 million as punitive damages. The judge noted that "Greed and resultant pressure on corporate officers to produce results out of line with the actual value of the assets they manage, turn those officers into vultures, devouring the very businesses which they are trying to enhance". 

Due to the close nexus that the Indian IT industry has with the US, the laws  of US could affect business operations of companies here. 

The recently-enacted Sarbanes Oxley Act contains several harsh provisions, which could have an adverse impact on any defaulting company. The Indian Companies Act, 1956 also contains several provisions for the prevention of mis-governance, but the implementation by the authorities has been lax, giving miscreants a free hand in pillaging the shareholders' hard-earned money. 

The IT sector is a mammoth force and is only gaining strength with the passage of each day and if this sector sees a downturn, then the Indian economy may spiral into the deep, dark depths of the late 80's. 

To avoid this, the industry should lift itself to new heights so as to not only ensure that work constantly keeps on flowing but to actually expand the bounds of its empire. 

There is no special situation, or a special set of norms and laws for the IT industry vis-à-vis corporate governance, but the fact remains that the board will have to become truly independent so that it can function free from any vested interests. 

Additionally, what may result in better corporate governance and the way to move forward for Indian IT companies might be to ensure that, their directors invest adequate time for decision making, adopting appropriate IP strategies, conducting IP audits, have well-documented policies and processes in place for the genuine growth of the company including a process for evaluating and rectifying, where necessary, the performance of the boards and their CEOs from time to time.