Does business failure tarnish an FD's reputation?

After the past few years it won’t be that uncommon for an FD to have been part of a failing company. But the decision to stick with a dying business or get out before the bad news is public marks the line between good and bad FDs. And those who manage the former can build it into a reputational gain as a turnaround guy, or at least a tough cookie with valuable experience.

Some FDs, though, are in danger of believing that one bad business experience is all the edge they need. “There is a problem with some FDs believing that, even though they were ‘bystanders’, they think they’re now an expert in problem businesses,” says John Bloor, director of business transformation at consultant Alium Partners.

It may be hard for others to judge whether a business failure can be attributed in some part to the incompetence of its FD. But the FD coming from such a business can help set their own narrative and their career future by not flinching the wind-up operation. That sort of experience is highly prized as the business world gets used to living with instability.

“It is impossible to say whether a business failure would tarnish the reputation of an FD,” says Simon Bailey, partner at Boyden, a headhunter for interim FDs. “But FDs needn’t necessarily try to gloss over their business’s demise: there’s always valuable experience to be gained.”