Companies create chief restructuring officer

The recession has forced an increasing number of companies to create a new board level role: the chief restructuring officer, says Interim Partners, the provider of interim managers. As more companies approach the limits of their banking covenants, they are appointing these new types of interim manager who have the specialist skills to quickly bring their companies' finances under control and to keep the banks 'on side'. Interim Partners says that the role of CRO comes with the level of authority to undertake a rapid programme of cost cutting and with the diplomatic skill to lead negotiations with companies' multiple funders. James Harley-Booth, Interim Partners head of private equity, said: '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.' He added: 'In the last recession, and even up to the start of the credit crunch, this role would have been led by a turnaround officer but banks are now demanding that this job function has more authority, power and independence from the CEO.' CROs are usually appointed to companies with a turnover of between £30m and £1bn. Harley-Booth added: '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 times.'
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