corporate recovery

{{Short description|Rescue of a company by accountants and financiers}}

A corporate recovery (also referred to as corporate turnaround, restructuring, retrenchment, or downsizing) is a rescue undertaken by professional accountants or financiers who are trained to assist the management of a company in financial and other difficulties. This work is usually initiated at the behest of the directors of the company and is normally undertaken by licensed insolvency practitioners.

Corporate recovery generally involves certain steps to achieve financial stability, such as asset liquidation, divestment, product elimination, layoffs, and operational efficiency improvements.{{Cite journal |last1=Robbins |first1=D. Keith |last2=Pearce |first2=John A. |date=1992 |title=Turnaround: Retrenchment and Recovery |url=https://www.jstor.org/stable/2486616 |journal=Strategic Management Journal |volume=13 |issue=4 |pages=287–309 |doi=10.1002/smj.4250130404 |jstor=2486616 |issn=0143-2095}} Firms may initially undergo a retrenchment stage whereby they cut costs and stabilize their finances. This is followed by a recovery stage, whereby long-term profitability and growth are prioritized. Strategies for the recovery stage may include market penetration, re-concentration, segmentation, acquisition, and new product-market expansion.Robbins, D. K., & Pearce, J. A. II. (1992). Turnaround: Retrenchment and Recovery. Strategic Management Journal, 13(4), 287-309. Retrieved from https://www.jstor.org/stable/2486616

To address recovery from ethical failures, companies often incorporate governance reforms, ethical training, and enhanced accountability measures during the recovery process. This helps to rebuild trust with stakeholders and ensure that future decision-making aligns with both legal and ethical standards, preventing a recurrence of previous failures.{{cite web |url=https://business-ethics.com/2012/03/05/9090-how-do-you-fix-your-reputation-after-an-ethical-lapse/ |title=How do you fix your reputation after an ethical lapse? |author=Larry Kahaner |website=The McGowan Blog on Business Leadership and Ethics |date=March 5, 2012 |access-date=January 21, 2025}}

Firms may assist in corporate recovery by offering services related to bankruptcy, financial advisory, performance improvement, trustee, and restructuring activities.{{Cite web |title=Corporate Recovery Services & Bankruptcy Support |url=https://www.cbiz.com/accounting-tax/services/advisory/corporate-recovery |access-date=2022-11-23 |website=www.cbiz.com}}