In a major restructuring exercise, Larsen & Toubro, the country's largest engineering conglomerate, is setting up at least five new companies.

Chairman A M Naik told Business Standard the "verticalisation" effort is aimed at ensuring better corporate governance as well as attracting talent to the 70-year-old company.

Each of these companies will have a CEO, a board, and finance and human resource management teams. L&T has also launched a global hunt for CEOs.

These CEOs will be a part of the group corporate management committee, but would not get a berth on the L&T board.

"We hope that some of the CEOs will eventually get into the main company's board," he said.

The companies will operate in L&T's new business areas of power projects, boilers, turbines, water and shipbuilding.

An exercise is on to identify other areas. The new structure will also open up opportunities for L&T insiders to move up the ladder.

"The L&T board has no vacancies now. But the corporatisation of the new businesses will suddenly increase the number of directors we require," Naik said.

L&T has been facing a high attrition rate, forcing the company to go in for extensions to existing employees.

On the rationale for setting up new companies, Naik said L&T has a complex structure having 62 different areas of operation.

The move to create operating companies within the overall L&T umbrella is aimed at simplifying the structure.

"No one chairman or CEO can manage the complexities as existing businesses are growing fast and there is a need to get into new ones," he said adding, the existing businesses will continue under the main company.

Talking on the new structure, Naik said, "We have just created L&T Power Projects, which is a platform for completing the building blocks. However, it's not easy to get a person who could create a mini-Bhel out of the power business unless he is given the rank of a CEO."

The power company, which is a wholly-owned subsidiary, will have two subsidiaries for boilers and turbines. In addition to the power business, L&T will set up L&T Shipbuilding within two weeks.

The shipbuilding company will announce the location of its yard in August.

Naik said L&T is also looking at appointing a CEO for L&T Infotech for which a global hunt is on.

While the CEOs for shipbuilding and infotech will be outsiders, the head of the turbine business will be an insider. L&T has recently appointed a CEO for its water business.