Every organisation faces an inevitable question: how would we close responsibly if required?

Business failures are rarely sudden. They are preceded by capital erosion, regulatory strain, or a gradual loss of strategic momentum. Yet too many boards only consider closure at the point of crisis, rather than treating it as part of the governance cycle. The reality is stark: in the UK nearly 12% of businesses closed in 2022, and across the EU fewer than half of new enterprises survive five years. In the US, around one in twelve firms closes annually.

Preparedness is not only about continuity, but also about closure. Supervisors in the UK, EU, and US expect firms to maintain credible wind-down plans that are both funded and feasible. Organisations that treat wind-down as a strategic discipline signal maturity to regulators, clients, and investors. In our experience, it also sharpens leadership discipline in running the business as a going concern.

What Makes Wind-Down Orderly?

An orderly wind-down means closing a business in a solvent, controlled, and transparent manner. It requires protecting clients and creditors, safeguarding employees, and ensuring obligations are fulfilled without market disruption.

The Prudential Regulation Authority defines orderly wind-down as “the capability to execute a full or partial wind down of trading activities in an orderly fashion… minimising the adverse effect firm failure could have on financial stability.” The emphasis is on feasibility, funding, and systemic safety.

From Theory to Practice: The Lifecycle

Credible wind-down readiness is built in three phases:

1. Preparedness (Business-as-Usual):Monitor triggers linked to appetite, tolerance, and capacity. Embed wind-down into governance and reporting.


2. Planning (The Playbook):Model costs and reserves, map critical services, assign roles, and define communication strategies.


3. Execution (Delivering with Control):Activate at agreed triggers, secure liquidity, repay obligations, and communicate transparently with stakeholders.

This lifecycle mirrors operational resilience. Resilience ensures continuity under disruption; wind-down ensures responsible closure when continuity is no longer viable.

Sector-Specific Pressures

• FinTechs and EMIs:Safeguarding client funds and maintaining investor confidence.


• Asset Managers:Ensuring orderly fund closures and fair investor redemptions.


• Banks:Integrating wind-down with recovery and resolution planning.


• SMEs/MMEs:Building proportionate plans to manage leases, creditors, and staff.


• Non-Profits/Charities:Protecting beneficiaries and donor trust in closure.


• Cross-Border Firms:Navigating multiple regulatory regimes and insolvency laws.

What High-Performing Organisations Do Differently

• Link wind-down triggers to risk appetite, tolerance, and capacity.


• Fund reserves and model balance sheet run-off.


• Map services and dependencies end-to-end.


• Assign clear governance roles and escalation pathways.


• Test assumptions through stress and reverse stress testing.


• Communicate transparently with regulators, clients, employees, and creditors.

From Obligation to Strategic Discipline

Wind-down planning is not a mark of failure. It is the ultimate test of governance maturity. Boards and founders that approach closure as a strategic discipline protect clients, preserve trust, and demonstrate foresight.

By embedding wind-down planning into risk and governance frameworks, organisations strengthen resilience in business-as-usual and prove that even at the point of exit, leadership remains accountable.

For more information, you can find a detailed article here - https://www.aevitium.com/post/orderly-wind-down

By Julien Haye

Keywords: Business Continuity, Business Strategy, Risk Management

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