HOW SHOULD THE CHAIRMAN REACT TO INCREASING INSOLVENCY
As increasing insolvency is a serious matter that can have significant consequences for a company and its stakeholders, the chairman should take a proactive and strategic approach to address the situation. Cash is king and managing expenses and cash is a critical process. Here are a few steps that the chairman can take in response to increasing insolvency:
Seek expert advice:
The chairman should seek advice from financial and legal experts who can help to assess the financial situation of the company and provide guidance on possible solutions. If the company is approaching an insolvency situation, the chairman should consider engaging an insolvency practitioner from a reputable insolvency firm.
Review financial statements:
The chairman should review the company’s financial statements and reports to understand the root causes of the insolvency and identify areas where improvements can be made.
Take action to address the issue:
The chairman should work with the board and management to develop a plan of action to address the underlying issues causing the insolvency. This may include cost-cutting measures, restructuring, or seeking new sources of financing.
Communicate with stakeholders:
The chairman should communicate openly and transparently with stakeholders, including shareholders, employees, and creditors, about the situation and the steps being taken to address it. This can help to build trust and maintain support during a difficult time.
Monitor progress and adjust the plan as necessary:
The chairman should regularly monitor the progress of the plan and make adjustments as necessary to ensure that the company is on track to recover from the insolvency.
Overall, the chairman should take a proactive and collaborative approach to address increasing insolvency, working closely with the board, management, and external experts to develop a comprehensive plan of action.