One of the more notable developments in bankruptcy practice over the past two decades has been the development of professionals who take control of companies when they are in financial distress. They are tasked with guiding the corporation through crisis. They differ from other executives in that there is no expectation that they will remain with the corporation, even if the corporation survives. If they do their job well, they will leave. To give one notable example, Enron hired a seasoned turnaround professional to oversee the sale of its assets (it sold it last major asset last week for $2.9 billion). Even while still serving as CEO of Enron, he become CEO of Kripsy Kreme when it encountered financial difficulties.
This path differs sharply from the normal expectation about leaders of companies. Generally, the thought is that they will stay so long as they do well (unless, of course, they voluntarily leave). Yet by all accounts being a CEO is difficult, and corporations face different challenges at different times. The rise of the tournaround profession to deal with the problem of financial distress raises the question of whether we will see the development of other professional managers designed to allow corporations to meet specific challenges. In other words, would some corporations be better off being run by a person whose future compensation turns on the ability to get the boards of other corporations to hire her in the future?