What are the indicators of a successful business rescue in South Africa? Ask the business rescue practitioners

Abstract

Background: Business rescue, in terms of Chapter 6 of the Companies Act No 71 of 2008, is still relatively new to the South African business environment. The need for a successful business rescue regime is beyond doubt. However, a consistent manner to measure the success of the regime has not been determined. Previous research into possible indicators of business rescue success was based on a review of international business rescue regimes that share the same underlying philosophy as the South African business rescue regime.

Aim and Setting: This study extends previous research efforts by soliciting the opinions of 16 South African, senior business rescue practitioners on the indicators of business rescue success.

Method: The researchers used a qualitative research approach. The Delphi research technique was used to gather qualitative and quantitative empirical data from business rescue practitioners.

Results: The experts reached a high level of consensus on various indicators of a successful business rescue. Most notable are that business rescue should save as many jobs as possible and that the actual outcome should be compared to that estimated in the business rescue plan. A novel indicator of success is the business rescue points saved or rescued, when using the public interest score.

Conclusion: The study makes a valuable contribution to the debate on what constitutes a successful business rescue by adding the considered opinion on indicators of success by one group of experts in the field of business rescue, namely senior business rescue practitioners.