Meet the new CRO… who?
recession has forced an increasing number of companies to create a new board
level role, the Chief Restructuring Officer, says Interim Partners, the leading
provider of interim managers.
companies approach the limits of their banking covenants they are appointing
this new type of interim manager who have the specialist skills to quickly
bring their companies’ finances under control and to keep the banks onside.
James Harley-Booth, Head of Private Equity of Interim
Partners, comments: “In the UK this role has been created by the credit crunch
and the number of CRO placements we have made really started to pick up post
Lehman Brothers. In the last recession and even up to the start of the credit
crunch this role would have led by a turnaround officer but banks are now
demanding that this job function has much more authority, power and independence
from the CEO.
The attitude of banks in this recession is quite
different to the last recession. Banks are now far keener to see a company work
through their problems. The banks know that in almost all cases they will get a
better payback by helping companies get back to profitability than from pushing
the company into insolvency proceedings.” CROs are usually appointed to companies with a turnover from
£30 million up to £1 billion.
Interim Partners says that banks will ask for a CRO to
be appointed as a less disruptive measure than asking for a change of Finance
Director or CEO. Says James Harley-Booth: “Banks take the view that most CEOs
of companies that have been hit by the credit crunch are more than capable of
running those companies under normal conditions but what banks ask us to find
is someone who has the experience of getting a company through these abnormal
28th October 2009
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