I was at a Board of Directors meeting for a client recently and the lack of urgency was brought up. The BOD has deferred certain decisions and that course of action has been uncovered as a problem for certain growth and funding plans.
The decisions had been deferred because times are good, they have celebrated a few great successes and the prospects for the remainder of the year are bright.
But, the good times are when it is the time to prepare for the bad times. It is time for reflection; does your company have a solid foundation? What are the company’s growth plans? What do you need to keep the successes moving forward? Is your company ready for a boom or a bust?
Once the issue was brought up, this BOD acted. The problem had been identified, there was some discussion and a decision was made and a plan was put into place. It was a marvel to witness. I have seen BOD’s wrestle with the same types of problems, continue to dither and waffle, and then defer yet again.
With the inverted yield curve hitting earlier this year, I do expect the US to have a recession of some form in late 2019 or early 2020. I have not done any further analysis or reading to make an opinion as to the severity. But I do expect a slow down to occur.
With this in mind I expect this BOD to be able to overcome the obstacle of some future bad times because they are acting appropriately to secure the future during the good times.