The doom and gloom across Australia’s heavily indebted corporate sector showed no signs of letting up today as new Insurance Australia Group CEO Mike Wilkins unveiled his much-anticipated strategic review.

As is typical in these situations, the new bloke painted his predecessor black, in this case writing down the value of IAG’s struggling UK operations by $350 million and scaling back their future operations.

IAG has now joined this very long list of company boards that allowed a new CEO to paint a very different picture by “clearing the decks” with big write-offs. So, what then were these directors doing supporting the previous strategy and accounts?

The Wilkins changes are pretty comprehensive. Four members of the senior management team are out, including long-serving finance director George Vernardos. The new guard includes two former Promina colleagues of Wilkins, Duncan West who will run CGU and Leona Murphy who will run a slimmed down corporate office.

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There was no number put on job losses but it presumably runs to several hundred if this claimed $130 million in annual costs savings will be achieved but they will share in a $60 million restructuring charge on the way out.

It will be interesting to see if Mike Hawker’s much-lauded push into the environmental, social and governance space is maintained because Wilkins is introducing a Promina-style model with a small head office and responsibilities pushed out to the various operating divisions.

The market wasn’t much impressed with the package as IAG shares fell 1c to $3.66 in a recovering market.

CEOs and chairs of troubled companies tend to leave in quick succession. We’ve seen it at Centro this year, NAB in 2004, Orica in 2001, PMP in 2002, Westpac in 1992 and BHP in 1998.

This makes James Strong’s position as chairman of IAG look rather tenuous, especially given he’s been in the job for seven years.

Strong foreshadowed the retirement of two directors at this year’s November AGM, Neil Hamilton and Macquarie executive Rowan Ross, but they are of a similar vintage having joined the board in 1999 and 2000 respectively.

A potential new chairman was unveiled today when Phil Twyman, the former AMP finance boss who then cemented his reputation running the global operations of big British insurer Aviva, joined the IAG board.

Then again, IAG might not need a new chairman if QBE Insurance comes back with a new bid before the Wilkins strategy is implemented

This is where bagging the old CEO gets tricky, because if Wilkins paints the situation too bleakly, it strengthens QBE’s hand in securing a takeover. That’s exactly what happened to GIO in 1998 when new CEO Nick Steffey unveiled a shock $26.7 million annual net loss and AMP’s George Trumbull promptly launched a hostile bid.

After this week’s Asciano and GPT share plunges, check out where they rank in this rapidly expanding list tracking the biggest share tanks in history.