How Boards Can Spot Early-Warning Signs Of Distress

Catherine Bromilow, Partner with PwC’s Governance Insights Center, joins TK Kerstetter to discuss how boards can recognize when their company is on the precipice of a potentially negative operating spiral.

When everything seems to be going well—the economy is robust and the stock market is rising—it’s hard to imagine hard times ahead. Yet, if boards fail to look for early-warning signs of distress, they may not identify potential risks before it’s too late.

In this episode, Catherine Bromilow, Partner with PwC’s Governance Insights Center, joins host TK Kerstetter to discuss how boards can recognize when their company is on the precipice of a potentially negative operating spiral.

“We don’t have to look back too far in history,” said Kerstetter, “to see signs where industries have been on fire and people have missed warning signals.”

Bromilow defines two types of red flags today’s boards should be looking for. The first is often easy for anyone to spot (e.g., declining stock price, investigations, significant restatements), while the second is far easier to dismiss in times of prosperity. Even then, industry or company performance doesn’t always mirror the wider economy.

As we sit here and tape this [episode], the economy is roaring ahead, the stock market is still doing well, but one of the things we know is, even when there is a really strong economy, there are always industries—either because they are countercyclical to the economy or because they are experiencing their own kinds of stresses and challenges—that are going to have a hard time and struggle.

— Catherine Bromilow, Partner, PwC’s Governance Insights Center
The original episode can be viewed here.


  • Get the Corporate Board Member Newsletter

    Sign up today to get weekly access to exclusive analysis, insights and expert commentary from leading board practitioners.
  • UPCOMING EVENTS

    JUNE

    13

    AI Unleashed: Oversight for a Changing Era

    Online

    SEPTEMBER

    16-17

    20th Annual Boardroom Summit

    New York, NY

    MORE INSIGHTS