Through our Viewpoints series, Riveron experts share their opinions on current topics, business trends, and industry news.
A recent poll by Chief Executive Group revealed a sharp decline in CEO optimism in March due to tariff uncertainty. Most boards consist of growth-focused industry experts, but what happens when they and senior leadership must swiftly pivot to a stabilization-and-preservation mindset?
Providing oversight on strategic decisions and balancing the interests of shareholders, employees, and customers looks very different now. Ensuring effective governance is crucial, especially during uncertainty. Strong governance structures can help organizations navigate turbulence and position them for future growth.
Four Immediate Action Steps for the Board:
- Engage: Set up a special committee, including a board member with restructuring and capital markets experience.
- Evaluate: Engage a third-party expert to prepare a quick assessment to understand near-term strategic alternatives.
- Take Action: Select high-impact options that deliver immediate results without compromising long-term objectives.
- Communicate: Communicate clearly and frequently with stakeholders, including customers, employees, lenders, and shareholders, to alleviate stress and minimize inquiries from concerned parties.
Immediate Areas of Focus:
Scenario Planning
_ Pressure test multiple scenarios: Best-case, worst-case, and most likely.
Financial Foresight
_ Scrutinize assumptions, enhance financial visibility, and increase reporting cadence.
Liquidity Optimization
_ Implement a 13-week cash flow plan: Understand near-term liquidity needs and explore strategic alternatives.
Reassess Executive and Board Skillsets
_ Seek outside expertise if your executives and board consist of growth-minded industry experts.
Strategic Communications Plan
_ Regain stakeholder confidence by clearly communicating your plan of action.
Some companies are withdrawing financial guidance due to the unpredictable economy. It's not always clear what action to take when you can't predict tomorrow, but organizations often lose precious time if executives are indecisive. This is compounded by stress responses and human behavioral factors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
