According to interim managers provider Interim Partners, a definite trend is emerging in the creation of the restructuring role, with organisations including General Motors, Cattles and Jessops appointing chief restructuring officers.
Employers 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 on side. These board members will be tasked with rapid cost cutting.
James Harley-Booth, head of private equity at Interim Partners, 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. 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 from 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. But if they are going to continue lending to that company or even increase lending they want a board- level executive in place that will deliver on the company's side of the bargain and that is rapid cost cutting and down payment of debt."
CROs are usually appointed to companies with a turnover from £30 million up to £1 billion.
According to Interim Partners, the banks will ask for a CRO to be appointed as a less disruptive measure than asking for a change of finance director or CEO.
But currently there are only around 100 CROs who have undertaken the role before.
Harley-Booth said: "We expect that as the summer ends and banks grapple with more problem loans that demand will far exceed supply."
"This is very different from a traditional non-executive role. The CRO will really drill down into the business and look at its cost base and borrowing levels in extreme detail. It is also far more senior a role than a turnaround consultant who will normally report into the CEO or FD."