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A Rare Luxury: Remaking Your Board During a Restructuring

February 2023

Despite their many well-known challenges, companies in restructuring have a rare luxury: to completely reconceptualize and reinvent their board of directors, breathing new life and energy where it is often desperately needed.

Our extensive experience working on the most prominent restructuring-related board builds since the outbreak of the COVID-19 pandemic has highlighted how just stark the contrast between these assignments and conventional board recruitments can be. Whereas the usual “board refresh” can take years, with new board members added only incrementally and occasionally, a company emerging from a reorganization or bankruptcy has a unique chance to reshape its board in one fell swoop to reflect its strategic direction, while also responding to both the challenges and opportunities of the reorganized company.

For companies facing these circumstances, the board refresh can serve as a central element of rethinking their future. We have seen how creditor-shareholders can create significant value by seizing this opportunity and asking the right question at the outset — What is our newly defined future and strategic plan, and who do we want guiding us there? — and then building their board accordingly.

In this book chapter, published in the book Navigating Today’s Environment: The Directors' and Officers' Guide to Restructuring (Second Edition), we examine how creditor-shareholders can take advantage of this unique situation to create a board of directors that can drive success into the future.

Download the chapter