People working in business are becoming increasingly concerned over the ability of their bosses to deal with the worsening economic climate due to a lack of experience, according to research by executive leadership and development consultancy The Aziz Corporation.
The survey of 200 business people found that 81 per cent think that the economy has been booming for so long that senior bosses have little or no experience of how to deal with a major slowdown, with over 60 per cent estimating that less than one in ten of their current management held senior positions at the time of the last recession in the 1990s.
The research also uncovered a widespread perception that business leaders are reluctant to come clean over their financial problems.
83 per cent of managers believe that while businesses are quick to announce good news, they are disinclined to release information that may be bad for their firms unless they are obliged to do so.
Almost three quarters (74 per cent) think that many companies are reluctant to communicate the full extent of the financial downturn they are facing.
Business executives appear to recognise the value of full and frank disclosure even when the market may find the news unpalatable.
90 per cent take the view that holding back information that can affect shareholders and other stakeholders is ill-advised and that companies are better off being truthful and transparent.
88 per cent agree that companies are more likely to recover the confidence of the public and of investors when they disclose bad news early and in full.
Professor Khalid Aziz, Chairman of The Aziz Corporation, comments:
“It is perhaps not a matter of chance that the recently-humbled HBOS had the youngest management team in the banking sector, with its youthful Chief Executive having never been through a recession in banking, and is now selling out to a bank with much more experienced leadership.
“In having to deal with and communicate bad news, a downturn exposes leaders who are muddling through without a plan. In the absence of full information, markets will assume the worst. Companies which refuse to come clean risk a steady and persistent drip of bad news.
“Businesses in difficulty should disclose their position early an