Bankruptcy – An Avalanche In Slow Motion

“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.” “What brought it on?” “Friends,” said Mike. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.” Ernest Hemingway, The Sun Also Rises Entrepreneurs and executives with experience in... Continue Reading →

A Tsunami of Bad Debt is rolling to our shore, to drown unexpected parts of the economy – and how to survive

Bankruptcy rates are closely linked to GDP volatility. In OECD countries the regular insolvency rate is around 8%. Though dramatic for the individual firms, this is a healthy process for the economy, as part of economic Darwinism, selecting the weakest market participants. Companies, failing to adapt to changing market conditions as a result of inertia,... Continue Reading →

Coronavirus and the Economy – Severe Risk of Bankruptcy and Financial Turmoil for SME Firms

COVID-19 has quickly evolved from a far-away tragedy, to what is now also a large economic threat to businesses all around the world. Due to globalization, supply-chain processes, and increased mobility for professional and recreational purposes, today’s economy has evolved into a complex system that is highly sensitive to disruption. On the same channels goods... Continue Reading →

What´s love got to do with it? – should shareholders worry, if the CEO gets divorced?

Chief Executives carry the responsibility for shareholder returns, numerous jobs, and compliance of the firm on their shoulders. Workdays are never finished after 8 hours, and weekends are generally not off. Top leaders are assumed, to rely on a stable and supportive relationship, to emotionally balance for the responsibilities and stress levels associated with the everyday... Continue Reading →

Why you cannot trust your CEO

CEOs are traded just one level below Batman. They are rock-star-cherished for success and condemned to eternity to corporate no-man-land, upon failure. To monitor, observe and discipline this league of its own, shareholders appoint Non-Executive Directors (NEDs) to the Board of Directors (BoD). A (subtle) tension is often observed between the NEDs and the CEO.... Continue Reading →

The Non-Executive Board – Praetorian Guard against Activist Shareholders

Activist Shareholders raise their voice over the legitimate interest, associated with their actual investment. This is competing with the economic interest of other shareholders. Activities of Activist Shareholders are also eligible to distract the management's focus and attention. The role of the Board of Directors (BoD) includes to balance the different spheres of interest and... Continue Reading →

Activist Shareholders – The role of the mean dwarfs in SME companies

Management is facing investors, engaging directly in strategy and operations. The perception of Activist Shareholders is ambivalent. The impact on the company can vary from delivering higher returns but also causing significant inefficiencies. For the management, it is a thin line, how to answer to calls from shareholders, in order not to disconnect from its investors, but also not... Continue Reading →

All investors are equal, but some are more equal than others

The common understanding of investors is over-simplified. Authorities disregard irrationalities, as well as degrees of financial sophistication. The idea, of an idealized rational investor is flatten out the spectrum of different investor types. This creates misalignment with regulations as well complexity for investor relations. Current research identifies five major types of investors, based on behavioural... Continue Reading →

The Board of Non-Executive Directors – Toothless Tiger or Turbo for growth and corporate development

The Board of Non-Executive Directors (BoD) can contribute significantly to the long-term and sustainable growth of a firm and offers similar benefits as good (and expensive) top consultants or strategic departments in the corporate landscape. The role and composition of the BoD determines success or failure in everyday life. On the other hand, increasing competition,... Continue Reading →

All good things come to an end – lack of strategy is the major cause of death in the corporate world

Following the right strategy is the key for long term going concern of a firm. As markets keep ever-changing, for mature companies, it’s vital to review the implemented strategies and also foster adaptability to new market conditions; whereas Start Ups are observed to launch with mistaken market assessments and competitive strategies into the rough waters of competition. Both observations... Continue Reading →

We have all read the same books?! – Yet, performance in turnaround management varies widely

If the executive team gets stuck in any of the five stages of the "process of depression" during the turnaround management, it is likely to lead to the bankruptcy of the firm. Individual psychological deficits (e.g. narcissistic characteristics) can be a reason for not reaching the state of Acceptance, more often, it is observed, the turnaround management consumes... Continue Reading →

How long should it take, to turnaround a company?!

Steve Tobak from CBS MoneyWatch identifies three phases for a turnaround, whereas the most important initial starting point of the turnaround process is forgotten. When on-boarded, stopping the firm's downward trend is critical and the core objective of the turnaround CEO. This aims for multiple stakeholders, including investors, employees, customers and suppliers; it is for the... Continue Reading →

The Autopsy of a Start-up bankruptcy (case study)

In autumn 2014 another promising and emergent Swiss Start-up filed for bankruptcy. Sadly, this is rather the rule than the exception. As out of every 11 serious ideas, only one succeeds. This delivers an attrition rate of approximately 90%. From the investor's perspective the numbers are even more frustrating, as "survival" is something significant different... Continue Reading →

The digital disruption of the national state

The concept, society has been arranged and governed by, for the past couple of hundred years, is disrupted by the digital transformation. This is happening right now. Today.   It is doubtful, if political leaders have anticipated this, nor, if they will be qualified to manage through the increasing uncertainties and eroding governance. As the link between governance of society... Continue Reading →

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