What is a Chief Restructuring Officer (CRO)?

By David Gross

As businesses navigate through their most challenging times, the need for efficient and effective crisis management and restructuring has become increasingly vital. The Chief Restructuring Officer (CRO) plays a critical role in leading a company through such times. This article summarizes the role of the CRO, the experience and expertise required to serve as the CRO, and the other traits that great CROs possess.

CROs bring a wealth of experience and expertise in general management, investment banking, finance and accounting, law, or related disciplines. They also bring a track record of restructuring assignments which equips them with the knowledge, teams, and tools to address the unique challenges faced by distressed companies. Perhaps most importantly, CROs bring negotiation capabilities—allowing them to bring stakeholders, under the most difficult of circumstances, and achieve fair outcomes.

When it comes to creating and filling the CRO position, a company's board of directors is heavily-involved. The scope of the CRO position must include responsibility for leading the company's strategic, financial, and operational restructuring, as well as ensuring that the company's operations continue to run smoothly, and retained on a contract basis. The CRO’s specific responsibilities are broad and deep—e.g., developing and implementing restructuring plans, negotiating with creditors, managing the company's cash flow, and working with management to improve operations. The CRO is also responsible for communicating with stakeholders, including employees, customers, suppliers, and lenders, to keep them informed of the company's progress along the way and to gain their support and cooperation.

When searching for a great CRO, look for candidates that move quickly to assess the health of a company, determine the key drivers of its performance, and develop a plan for improvement. In addition, look for CROs that effectively manage teams, delegate tasks, and motivate employees to achieve lofty goals within 18 to 24 months—when the probability of successful restructuring a company is at its highest.