Group chairman GP Goenka told The Financial Express: ``We are proposing a system whereby deviations from the budgets will result in warnings, and eventually dismissal for non-performing managing directors.''

According to Mr Goenka, if the budget is overshot in the first quarter, there will be a warning issued to the managing director. The same procedure will be repeated for two more quarters, after which in the fourth quarter, if the situation continues, the managing director may be asked to go.

This major change will be discussed at a meeting of the Duncan Goenka group supervisory board, headed by management guru Sumantra Ghoshal, shortly. Mr Goenka said there are four managing directors from group companies in the supervisory board, and hence there will be a debate on the issue in detail at the board's next meeting.

The idea, he said, in introducing this measure was to ensure the highest levels of corporate governance, and ensure shareholder returns from group companies. ``It's all about shareholder returns. As a shareholder, I must have the companies running efficiently, without budgets being overshot,'' he said

The Duncan Goenka group is in the midst of a total overhaulof its human resources systems as well. Alongside, the supervisory board is expected to also take up for discussion the aspect of exiting from some of the group companies to unlock value and invest it in the core businesses of the group. So far, the group's main problem has been to find buyers for the companies from which it wants to exit. Among such areas is cement and, possibly even paper. But the right buyer with the right price continues to elude the group.

Following the recommendations from Andersen Consulting, the group is now busy following these up and putting systems in place, Mr Goenka said. In most of the companies, hectic follow-up activity on the Andersen report is under way. The group is also putting in place customer response systems to understand what customers think about its products and services.

``Ultimately, what matters is what our customers think of us. Hence this system,'' he said.