It is now widely accepted that the faith placed in independent directors, to improve the standards of corporate governance, has often been misplaced. Most of them, and not just in the case of Satyam Computers, tend to go along with the promoters who appoint them.
Another experiment with independents, in this case as experts, appears to be going the same way. Consider the case of the director-general of hydrocarbons, VK Sibal, who recently cited reports by some independent experts to validate his claim that the capital costs of Reliance Industries operations in the Krishna-Godavari Basin were not exaggerated, as alleged by ADAG chief Anil Ambani.
One of these was from the Mustang Group, which ADAG officials later pointed out had done a lot of consulting work for Reliance, and so could not be regarded as independent.
The second independent expert, P Gopalakrishnan, worked at the School of Petroleum Technology in the Pandit Deendayal Petroleum University where Mukesh Ambani, chairman of Reliance, is the chairman.
It is true, as Mr Sibal argues, that experts are likely to have done work for companies in the field, but it does raise questions about bias and impartiality.
Second, the government needs to do its own due diligence instead of just relying on the word of experts who may or may
not be biased. So it is unfortunate that the audit attempted by the Comptroller and Auditor General has been held up for two years because Reliance will not share data.