Agree who can speak for the company during a director deadlock

A disagreement can reach outside the boardroom

One director tells the accountant to prepare for closure while another asks a supplier to extend credit for new work. Those messages can create confusion before any proper decision has been made. If directors disagree about the company's future, obtain advice about who can give instructions and how urgent company decisions will be handled while that disagreement remains unresolved.

List the instructions already given

Imagine two directors of a maintenance company taking opposite positions after several customers stop paying. Record existing instructions to the accountant, lawyer, bank and key suppliers. Include who sent them and whether anyone has acted on them. Do not erase an inconvenient email or tell staff to pretend it was never sent; the adviser needs the actual sequence.

Bring the financial risk into the discussion

ASIC advises directors to seek qualified advice promptly if insolvency is suspected. A dispute over authority does not remove the underlying payment problem. Give the adviser the current financial position as well as the company's governance documents. Ask how immediate instructions and obligations should be managed without assuming that either director's preferred outcome has already been authorised.

Source: ASIC: What to do if your company is insolvent

Choose a communication process with advice

The appropriate process depends on the company and its circumstances. Ask who can approve instructions, which matters require a further decision and how disagreements should be recorded. In the maintenance company's example, an administrative contact could collect questions without having authority to promise payment, agree fresh borrowing or appoint an external adviser on behalf of everyone.

Correct inconsistent messages carefully

If outsiders have received conflicting directions, ask the adviser how to clarify the company's position. Identify the exact communication that needs correction. Avoid announcing that the other director has no authority without a proper basis. Keep the clarification factual, limited to what has actually been decided and directed to the people who need to act on it.

Revisit authority when the position changes

Record agreed instructions and the basis for them, then update the relevant contacts when a valid decision changes the position. Staff should know where to send urgent questions. A clear communication process will not resolve the directors' disagreement by itself, but it can reduce the extra commitments and misunderstandings created while the business seeks qualified help.