Margaret Ewing, mentor to some of the UK’s top finance directors, has urged
FDs to talk to their banks as the number of company collapses rises to the
highest levels on record.
The former CFO of BAA and Deloitte’s vice chairman called for FDs to take the
lead and convince board members talks are needed before the situation becomes
‘It is amazing how some executives behave like turtles when things get
tense,’ she said.
‘They pull back into their shells and hunker down for the duration. So do not
be a turtle. As the FD, it is down to you to stick your neck out and make that
tough first call.’
Ewing’s comments come after cases of lenders pulling funding after being
approached, which may explain businesses’ reluctance to make the first move.
Woolworths, Waterford Wedgwood and wedding company Wrapit all folded after
lenders refused to keep bankrolling them or allow them to put off loan
‘The bottom line is that bankers like leaders with steady hands,’ said Ewing.
‘They want you to communicate with them proactively and often. In fact, it might
not be a bad idea to pick up the phone right now and set up a meeting.’
But banks have also been proactive and beefed up their intensive care units,
the divisions which give advice to struggling companies. Last October, Lloyds
said they had hired more people and HSBC and HBOS have kept staff levels up in
preparation for more approaches from clients.
Mark Palios, turnaround specialist and former chief executive of the Football
Association, said ‘Bankers can only get a secondhand understanding of issues
such as working capital. The onus is on you, the management, to be able to
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