The decision could lead to, as a first step, setting up of various committees - like for audit, remuneration, legal and others - on the boards of the largest AV Birla companies.

Birla told The Financial Express: "We plan to implement all the recommendations of the corporate governance committee in the group to whatever extent possible." He, however, did not wish to elaborate on the details.

The Aditya Birla group is one of the few largest Indian business houses which has yet to take concrete steps towards enforcing corporate governance in a major way. It has, over the last year, said it would strive to enhance shareholder return in every possible manner.

The management structure within the large Birla companies - like flagship Grasim, Hindalco,Indian Rayon or Indo Gulf - is vastly different from that in other companies.

The boards of these companies, say sources closely associated to the group, are dominated by non-executive directors close to the Birla family, while operational heads seldom get a berth on the boards.

Only recently, Askaran Agarwala, who has been the president of Hindalco for years, was elevated to the board. Another group stalwart Mahesh Bagrodia, who had been the group's cement business head, was finally made a director on the Grasim board, but only after he relinquished charge of the cement business.

Another newcomer in the group, Debu Bhattacharya, former director of Hindustan Lever, is a member on the Indo Gulf board by virtue of his being the managing director.

Most of the other Birla companies are structured in a manner where various divisions have their own autonomous management structure, with complete functions including production, marketing and even finance.

However, recently the group initiated a processwhereby the finance functions are being largely centralised. As part of the exercise, DD Rathi was made the chief financial officer of Grasim, while earlier each division had their independent finance heads.

Even in Indo Gulf, which has now emerged as a major contributor to the group turnover with the commissioning of the copper project, has two independent finance chiefs - NK Jalan for the fertiliser division and DD Jalan for the copper division.

The group has also initiated a process of consolidating holdings through an umbrella company, which will also reduce cross-holdings to a large extent.