The BoardSolvency platform is not built on opinion. It is built on a documented body of independent research conducted by Stephen Fairbairn from 2016 through to 2026 — drawing on academic work, professional practice, regulatory guidance, and empirical observation of Australian business closure patterns. This chapter records that research foundation.
A note on the research timeline
The initial research findings were documented in April 2016. The Sustainable Cashflow framework was developed and refined through independent research from 2019 to 2024. The Sustainable Cashflow Manual was completed in January 2025. ASIC updated Regulatory Guide 217 in December 2024 — eight years after the initial research identified the gap that RG 217 now addresses in law.
The sequence matters. BoardSolvency is not a response to the regulatory update. It is the culmination of a decade of independent research that the regulatory update has now confirmed and validated. The sources below are the intellectual foundations of that research.
Section 13.1 — Primary source: Stephen Fairbairn's original research
April 2016
Initial Research Note — Australian Business Closure Costs
The foundational document establishing that 60% of Australian businesses fail within three years, that 46.7% of exits are caused by inadequate cashflow, and that the annual cost of business closures in Australia approximates $11.25 billion. This document predates all subsequent regulatory and commercial development of the BoardSolvency framework by eight years.
2019–2024
Sustainable Cashflow Framework — Research and Development
Five years of independent research developing the Sustainable Cashflow equation, the breakeven gap concept, the growth trap pattern, and the three-year forward forecasting discipline. Multiple draft versions of the framework were produced, tested, and refined through this period.
January 2025
Sustainable Cashflow Manual
The complete documentation of the Sustainable Cashflow framework — the primary source for Chapters 1, 3, and 8 of this manual. Contains the Sustainable Cashflow Formula, the growth trap analysis, the debt and credit cycle framework, and the three-year forecasting discipline. The intellectual foundation of the BoardSolvency platform.
2026
NED Solvency and Governance Research Series
Eight governance research articles covering SME solvency, accountant intervention, ground-level SME reality, the growth trap, cashflow management, director duties and personal liability, the debt and credit cycle, and a series index. Published through the BoardSolvency platform documents library.
2026
Independent Director Verification Framework
A directed research document addressing ASIC, the ASX Corporate Governance Council, and the Australian Institute of Company Directors — proposing a standardised framework for independent director solvency verification aligned to ASIC RG 217.
Section 13.2 — Academic and professional sources
1997, 2003, 2016, 2019
The Innovator's Dilemma (1997); The Innovator's Solution (2003); Competing Against Luck (2016); The Innovator's DNA (2019)
Christensen's disruptive innovation framework explains how the accounting software industry evolved to serve the compliance culture — locking out the cashflow management use case that BoardSolvency addresses. His jobs-to-be-done framework from Competing Against Luck provides the language for understanding why directors need a different tool from what accountants need.
2013, 2022
Playing to Win (with A.G. Lafley, 2013); Strategy vs Planning (Harvard Business Review, 2022)
Martin's distinction between strategy and planning — and his analysis of why operational plans built on profit logic fail to address cashflow sustainability — is central to the Sustainable Cashflow framework's critique of standard management reporting.
2023
Right Kind of Wrong: The Science of Failing Well (2023)
Edmondson's research on how intelligent professionals systematically fail to act on evidence of risk — through cultural pressure to confirm existing practice — explains why the accounting profession's focus on profit reporting persisted despite growing evidence of its inadequacy for director governance. Central to Chapter 1's analysis of why the profession has not solved the cashflow problem.
2021
Why Startups Fail (Harvard Business School, 2021)
Eisenmann's systematic analysis of startup failure patterns — including the false start, the wrong market, and the speed trap — provides academic grounding for the growth trap pattern that the BoardSolvency framework identifies in established businesses as well as startups.
2019
The Infinite Game (2019)
Sinek's documentation of Milton Friedman's profit maximisation doctrine and its consequences for corporate culture provides context for why the financial profession became oriented toward shareholder returns rather than sustainable trading operations. Referenced in Chapters 1 and 3.
2014
Zero to One: Notes on Startups, or How to Build the Future (2014)
Thiel's framework for building businesses with genuine competitive advantage — particularly his analysis of why most businesses compete rather than create — informs the BoardSolvency commercial positioning as a platform with no current competitor in the director solvency monitoring space.
2024
The Venture Mindset: How to Make Smarter Bets and Achieve Extraordinary Growth (2024)
Strebulaev and Dang's analysis of how venture thinking — accepting uncertainty, making asymmetric bets, and monitoring continuously — applies to business governance beyond the startup context. Supports the BoardSolvency argument for continuous monitoring over periodic review.
Section 13.3 — Regulatory and statistical sources
December 2024
Regulatory Guide 217 — Duty to Prevent Insolvent Trading (updated December 2024)
The primary regulatory document establishing director obligations for solvency monitoring in Australia. The December 2024 update confirmed and significantly expanded the proactive monitoring standard that the BoardSolvency research had been advocating since 2016. Central to Chapters 2 and 7.
Ongoing
Business Entry and Exit Statistics; Counts of Australian Businesses including Entries and Exits
The primary source for Australian business closure rate statistics — 60% of businesses closing within three years, cashflow as the leading cause of exit. Used in the April 2016 initial research note and referenced throughout the manual.
Ongoing
Small Business Finance and Conditions Survey data
RBA survey data on SME cashflow conditions, access to finance, and financial stress indicators — providing macro-economic context for the individual business cashflow patterns the BoardSolvency framework addresses.
2021
The Top 12 Reasons Startups Fail (2021)
CBInsights' analysis of 111 startup post-mortems found that running out of cash was the second most common cause of startup failure, cited by 29% of failed companies. Provides international comparative data for the Australian cashflow failure statistics.
2001 and amendments
Corporations Act 2001 — Section 95A (solvency definition); Section 588G (insolvent trading); Part 5.8A (safe harbour provisions)
The foundational legal framework within which BoardSolvency operates. Section 95A defines solvency as the ability to pay debts as and when they fall due — the cashflow test that underpins every metric in the platform.
Section 13.4
Recommended reading for directors
The following books are recommended for directors who wish to deepen their understanding of the governance and financial principles that underpin BoardSolvency. Each is written for a general business audience — no accounting or legal qualification is required.
The Innovator's Dilemma
Understand why established industries — including accounting — fail to see the disruption coming. Essential context for why no tool like BoardSolvency existed before now.
Right Kind of Wrong
Understand why smart people in well-run organisations systematically fail to act on evidence of risk. The most important governance book of the last decade for directors who want to understand their own blind spots.
The Infinite Game
Understand the difference between finite thinking — quarterly results, profit targets — and infinite thinking — sustainable operations, long-term survival. The philosophical foundation for the Sustainable Cashflow framework.
Why Startups Fail
A rigorous, evidence-based analysis of why businesses fail — applicable to established companies as well as startups. The growth trap and cashflow patterns described apply at every stage of business development.
Zero to One
Understand competitive advantage and what it means to build something genuinely new. For directors assessing whether their company has a sustainable competitive position — and whether that position is reflected in its cashflow.
Playing to Win
The clearest book on what strategy actually means versus operational planning. For directors who want to understand why their management team's budget is not a strategy — and what a real strategic choice looks like.
"The research behind BoardSolvency spans a decade and draws on some of the finest minds in business strategy, organisational behaviour, and innovation theory. But its most important source is simpler — the observation, repeated across hundreds of businesses over many years, that the gap between what accounting measures and what directors need to know has been destroying Australian businesses and exposing directors to personal liability for far too long."
Stephen Fairbairn — BoardSolvency User Manual, July 2026