As financial markets are starting to recover from rate shocks, rampant inflation and other macro-economic challenges, companies have only just begun to feel the impact on their business models – requiring boards to adopt a new perspective.
Impact on business models requires new perspective
Whether it is COVID, soaring energy prices, interruption of supply, trade restrictions or unexpected public activism, in today's reality boards are increasingly exposed to unprecedented, major challenges without much time to prepare and adjust to the new circumstances.
Companies may have to deal with special situations, crisis management and stakeholder dynamics emerging from disruptive events
Most external events have a natural owner in the company and, considered in isolation, may seem clearly defined and manageable. However, the ripple effect, especially if coupled with other developments, may have a wider disruptive impact. No individual in the company will have complete oversight, which means that these types of events require the immediate attention of senior management and are, as such, executive matters by nature.
We can help companies weather the storm
Our team draws on years of experience dealing with special situations, crisis management, governance and stakeholder dynamics during disruptive events. We help map exposure to liabilities and third party involvement (concentration risk), and help to build a contingency plan. Communication, clearly defined roles and ability to rapidly scale up or down are must-haves for companies from day one. On these pages, we help identify other points to focus on, do's and don'ts, and lessons learned from live cases. We deliver insights on potential consequences and considerations to be taken into account when navigating uncertainties, and offer "no regret" desktop preparations. See more below.
Liquidity: Keep control of the process
The limitations and covenants in debt instruments go beyond the financial covenant report. A refresher of what those are prevents surprises and keeps you in control of the process towards lenders.
Annual accounts: Be prepared for auditor discussions
Auditors will require a view on the impact of the developments. If that impact may be material, expect serious discussions in this year's annual audit.
Tax: Be aware of pitfalls and opportunities
Mapping out potential tax consequences and related actions is key.
Financing: Scenario planning is key
Pending M&A, commercial, financing and capital markets transaction processes may be paused, slowed down or reconsidered.
Commercial contracts: Map risks and uncertainties
Counterparties may also be looking to terminate or renegotiate existing commercial contracts.
Pro-actively focus on no-regret preparations to retain full optionality to address such potential impact.