How does a CVA affect company directors?

A CVA allows directors to retain control of the day-to-day management of the business, which is one of its main advantages compared to administration. Directors continue running the company but must comply with the repayment terms agreed with creditors and monitored by the insolvency practitioner. This means directors gain breathing space and avoid the reputational damage of liquidation, but they also face strict oversight. Directors are expected to provide accurate accounts, maintain cashflow discipline, and deliver regular payments into the CVA. If they fail to do so, the CVA may collapse, putting the company back at risk of enforcement action. While the process reduces immediate pressure, directors must accept reduced flexibility and increased accountability during the arrangement. Importantly, a CVA can also help directors protect themselves from accusations of wrongful trading, because they are demonstrating proactive steps to repay creditors and rescue the business. For many directors, a CVA is a way to balance control with responsibility during a difficult period.