First step would be to make sure the stock is properly and securely fitted. If it chipped because it was too close to the bolt, that's one thing. If it chipped because the stock isn't properly in place, the stock can move, or the design doesn't hold the stock rock solid, that's different. Let's talk about each possibility:
1. If the stock can move. If the stock isn't securely attached, start by making sure all screws, bolts and other attachments are snugged up. (Tight, but not overtight - you don't want to crush the wood or anything)
2) If the stock isn't properly in place or the design sucks. These would likely be related. For example, on a cheap design, the bolt securing the stock may simply run through a hole drilled through the wood. Such a design may put a lot of stress on the wood when fired and the solution to this part of the issue may require sleeving the drill hole through the wood (to better distribute the stress) Secondary forms of attachment, glass bedding, or other methods may help, too.
Assuming that the issue is not the securing of the stock to the barrel assy, or that this issue has been fixed, the next steps I would take are:
A. Remove the stock and carefully glue the broken chips back in place. Be careful not to use too much glue (wood adhesive works fine) and concentrate on getting even coverage on the entire surface. Immediately wipe off any glue seeping out of crack before and after clamping. If possible, clamp in place and let dry for 24 hours (use pieces of popsicle sticks or other wood between clamp and piece being glued to avoid marring stock or chip surfaces). Take your time - do only one chip at a time even if it takes days. When all chips are solidly glued back in place...
B. Line up barrel assembly (without actually reattaching) and judge how much the bolt channel will have to be enlarged to prevent it from hitting the bolt in the future. Start with too little rather than too much, you can always remove more later. Using proper wood carving tools ( a set at Princess Auto or such isn't a lot of money) carefully expand the channel to close to where you determined it needs to be expanded. Then...
C. Using coarse sandpaper at first, then finer and finer grits of sandpaper to achieve the final smooth contours, do the final polishing to remove any tool marks and leave a smooth surface like the rest of the stock.
D. Strip all remaining finish off the rest of the stock using a gel paint stripper. Lightly sand the whole stock with fine sandpaper (somewhere in the 180 grit range).
E. Apply liberal amounts of "walnut" or "mahogany" wood stain or other shade, depending on how dark you like your stock and/or how much redish tones you like in it. Immediately wipe all excess stain off with a clean, dry cloth. Apply a second coat of stain, if the first coat looks like it may be too light. Allow all coats to dry thoroughly before next coat or going to next step.
F. Before beginning this step, find an area (usually where the barrel goes) where no finish is needed and you can hold the stock with one hand. Also have a hanger ready to hang stock while finish dries. In a clean space with no dust, using a couple of bare fingers, rub Tru Oil or similar gun stock finish evenly over entire surface. Do not allow drips or buildup to form. Keep rubbing until finish starts getting sticky. When smooth and even all over, hang to dry. After finish coat has cured for 24 hours, lightly rub with 'tripple O' steel wool (synthetic scrub pad type acceptable). Repeat step F until desired finish is achieved.
G. Reassemble gun and admire your handiwork.
