BoardSolvency · Director's Guide

The BoardSolvency User Manual

Twelve chapters covering everything a director needs to know about solvency monitoring — from the research behind the platform to the legal obligation, the analytical framework, and the practical tools that turn obligation into evidence.

12
Chapters
5
Parts
10
Years of research
Draft 1
May 2026

What this manual explains

BoardSolvency is not accounting software. It is a director governance tool — built to meet a legal obligation that every Australian director now carries under Section 588G of the Corporations Act and ASIC Regulatory Guide 217.

This manual explains what that obligation is, why standard management reporting does not meet it, and how BoardSolvency gives every director the independent, continuous, documented solvency monitoring the law now requires — in plain English, without an accounting degree.

Written by Stephen Fairbairn, Noosaville QLD — based on a decade of independent research into Australian business failure and cashflow management.

Who should read this
Every director of every Australian company — executive, non-executive, full-time, part-time, ASX-listed or private Pty Ltd. The obligation is universal.
No accounting background required
Every financial term is defined in plain English in Chapter 11. Every number the platform produces is explained in Chapter 7. A director who has never read a cash flow statement will understand this manual.
PDF versions available
Each chapter is available to download as a PDF — for printing, sharing with the board, or filing in your director audit trail.
Where to start — by reader type
I am a director
Start with Chapter 1 for context, Chapter 2 for your legal obligations, and Chapter 7 to understand the solvency dashboard. Chapter 10 shows the full platform in action.
Start: Ch 1 → 2 → 7 → 10
I am an accountant or advisor
Start with Chapter 3 for the analytical framework, Chapter 5 for data import from Xero or MYOB, and Chapter 9 for how the platform supports board reporting and safe harbour documentation.
Start: Ch 3 → 5 → 9 → 12
I want to see it in action
Go directly to Chapter 10 — the Bayside Home & Living worked example. Three years of real data showing a profitable business approaching cashflow crisis. The most powerful demonstration of why BoardSolvency exists.
Start: Ch 10 → 7 → 2
Part One
Foundation
Chapter 1
Directors Accountants Partners
Foreword — The Research Behind BoardSolvency
Stephen Fairbairn's personal research journey — from the wreckage of small business failure to the platform that gives every Australian director the solvency intelligence they now have a legal obligation to have. Covers the April 2016 research findings, the Fairbairn Formula, the profit culture problem, and how ASIC RG 217 confirmed what the research identified a decade earlier.
Read Chapter 1 → ↓ PDF
Chapter 2
Directors Accountants Partners
The Director's Legal Obligation
What every director must now know about solvency monitoring under Australian law — explained in plain English. Covers Section 588G, ASIC RG 217 December 2024, the safe harbour provisions, personal liability including Director Penalty Notices, the information asymmetry problem, and lessons from Australian governance failures.
Read Chapter 2 → ↓ PDF
Chapter 3
Directors Accountants Partners
The Sustainable Cashflow Framework
The analytical foundation of BoardSolvency — seven years of independent research explaining why profit is not solvency, how the three financial statements work together, the Fairbairn Formula, the growth trap, the debt and credit cycle, and the two breakeven points that define the danger zone where profitable businesses become insolvent.
Read Chapter 3 → ↓ PDF
Part Two
Using BoardSolvency
Chapter 4
Directors Accountants
Getting Started with BoardSolvency
A plain English guide to logging in, creating your company, entering financial data year by year, and understanding what the platform calculates automatically. Includes the complete field guide for the Income Statement, Balance Sheet, and Cash Flow Statement — with auto-calculated and manual-entry fields clearly identified.
Read Chapter 4 → ↓ PDF
Chapter 5
Directors Accountants Partners
Importing Financial Data
How to bring your company's financial data directly into BoardSolvency from Xero, MYOB, or QuickBooks — with step-by-step export guides for each system. Covers field mapping, the six validation checks, what BoardSolvency does when no cash flow statement exists, and the phased import roadmap.
Read Chapter 5 → ↓ PDF
Chapter 6
Directors Accountants Partners
Multi-Entity and Group Structures
How BoardSolvency supports directors managing complex group structures — parent companies, subsidiaries, and consolidated solvency views across the whole group. Covers when to use the multi-entity module, how to add subsidiaries, the consolidated group analysis, and individual entity vs group reporting for directors with obligations at both levels.
Read Chapter 6 → ↓ PDF
Part Three
Solvency Analysis
Chapter 7
Directors Accountants
Reading the Solvency Dashboard
Understanding every metric, ratio, and signal that BoardSolvency produces — in plain English, without accounting knowledge assumed. Covers the four key indicators (DSCR, Cash Trend, Breakeven Gap, Current Ratio), ATO obligations, the traffic light system, and how each monitoring session builds the safe harbour protection record.
Read Chapter 7 → ↓ PDF
Chapter 8
Directors Accountants
The Forecast and What-If Module
Forecasting is a director obligation — not a management task. This chapter covers the three-year forward view, the monthly review and update discipline, the scenario adjuster for revenue and cost modelling, equity and reserve provisions, and the 13-week rolling cashflow forecast. Includes the recommended review cadence from green to red.
Read Chapter 8 → ↓ PDF
"The director who arrives at an insolvency practitioner's office with a BoardSolvency audit trail showing months of independent monitoring, documented responses to warning signs, and evidence of professional engagement is in a fundamentally different legal position from the director who arrives with nothing but a management report and an apology." Stephen Fairbairn — BoardSolvency User Manual, May 2026
Part Four
Board Governance
Chapter 9
Directors Accountants
Board Reporting and Documentation
How to produce, present, and preserve BoardSolvency solvency reports for the board. Covers the management report vs BoardSolvency report comparison, the eight-section solvency report contents, how to present as a standing board agenda item, building the director audit trail, safe harbour documentation, and when to escalate to accountants and insolvency practitioners.
Read Chapter 9 → ↓ PDF
Chapter 10
Directors Accountants Partners
Worked Example — Bayside Home & Living Pty Ltd
A complete three-year demonstration case — a retail business growing strongly on its profit and loss statement while quietly approaching a cashflow crisis that only the integrated three-statement analysis reveals. FY2024 green. FY2025 amber warning signs. FY2026 director action required. The growth trap made visible in real numbers.
Read Chapter 10 → ↓ PDF
Part Five
Reference
Chapters 11 & 12
Directors Accountants Partners
Glossary and Research Sources
Chapter 11 provides plain English definitions of every financial, legal, and BoardSolvency-specific term used throughout the manual — no accounting background assumed. Chapter 12 documents the full research foundation of the platform, from Stephen Fairbairn's 2016 initial findings through to the academic, regulatory, and statistical sources drawn on across a decade of independent research.
Read Chapters 11 & 12 → ↓ PDF
Chapter 11 — Glossary covers
  • All financial terms — Balance Sheet, Cash Flow Statement, DSCR, Working Capital, EBIT and more
  • All legal terms — Section 588G, RG 217, Safe Harbour, Director Penalty Notice, Insolvency
  • All BoardSolvency terms — Breakeven Gap, Fairbairn Formula, Growth Trap, Sustainable Cashflow
Chapter 12 — Sources covers
  • Stephen Fairbairn's primary research — 2016 to 2026
  • Academic sources — Christensen, Martin, Edmondson, Eisenmann, Sinek, Thiel, Strebulaev
  • Regulatory sources — ASIC RG 217, Corporations Act, ATO, ABS, RBA
  • Recommended reading list for directors
Appendices
Supporting Reference Material
Appendices A.1 – A.5
In preparation
Field Mapping, Ratios, ASIC Extracts & Technical Reference
The appendices are being prepared in parallel with the platform's ongoing development and the alpha review process. They will be published as part of the first formal release of the manual following alpha testing.
Available in a future revision
Appendices planned
  • A.1 · Import field mapping — Xero and MYOB to BoardSolvency
  • A.2 · Solvency ratio reference — calculations and benchmarks
  • A.3 · ASIC RG 217 — key extracts relevant to directors
  • A.4 · The BoardSolvency innovation statement
  • A.5 · Disclaimer and limitations
Note on timing
  • Appendices will be completed and verified against the live platform before the beta review stage. Content accuracy against ASIC RG 217 and the Corporations Act will be confirmed prior to publication.