Board Briefings

Board Briefings

During the current pandemic you as a board may well be facing a range of problems and issues you have not had to deal with before.

For guidance, we as investment partners have written a series of briefing papers specifically aimed at helping boards of directors.

This briefing focuses on those companies that are unable to pay HMRC debts when they are due.

Whatever the reasons HMRC will make every effort to collect the overdue money and it has an escalating series of actions it can take.

Even if the judgment is only for a small amount, the existence of a County Court Judgment gives rise to business critical risks of enforcement, reduction in credit, damage to banking relationships, damage to reputation and employee morale, and potential personal insolvency related liability for directors.

Given the uncertain economic environment facing many businesses as a result of the Covid-19, maintaining the support of the company’s bankers is likely to be more important than ever. Boards need to ensure that they understand how their lenders view the company and actively manage their banking relationship.

Learning to live with uncertainty means continually gathering information and reassessing the changing situation.

Directors instead need to be adaptable by developing an ability to assess complex situations and make simple decisions in the face of uncertainty.

It might seem obvious but without sales there is no business.

Again obvious but without marketing there are no leads and without leads there are no sales. It is extraordinary how often marketing budgets are cut when sales are drying up.

The disruption caused by Covid-19 will have had an impact on your business and will also have created opportunities in your market. One approach for dealing with both any threat to survival and exploiting opportunities is to consider competitors as possible targets for merger, sale or acquisition.

Your business is a link in a value chain and will be dependent on both suppliers and customers who will all want to derive value from doing business with you.

This Board Briefing looks at the reliability of supply chains and highlights some considerations for the board of directors to ensure they are right for the future.

The furlough scheme has justified putting off dealing with the cost of employing staff but now it is due to be phased out boards need to make decisions about how many staff they can afford to keep on the payroll.

Covid-19 has brought about uncertainty and Boards need to not only ensure their companies survive in the short term by managing tactically, but must also prepare and position their company for the long term by thinking and resourcing strategically.

There is no shame for a board of directors to admit it is in unfamiliar territory facing a financial and operational crisis. The board that had been well composed to thrive in normal market conditions is now likely to  be feeling unsure about the business’ future and possibly experiencing personal anxiety.