Brexit in the Boardroom: The View From Business
An FTI Consulting survey of over 2,500 corporate leaders in four EU countries (UK, Germany, France, and Spain) reveals their anxieties — and plans — for dealing with Brexit.
The Brexit vote in June 2016 threw European businesses into a whirlwind of uncertainty. For months, questions swirled around the terms of the UK’s divorce from the European Union (EU): Would the UK continue to be part of the Single Market? Would EU citizens in the UK be able to continue working there? How would withdrawal affect the UK economy?
Though some questions have been answered, many others remain. Now, with the March 29, 2019 deadline for withdrawal rapidly approaching, business leaders in Europe are eyeing the divorce date with a mixture of optimism and caution. On the one hand, they believe the outcome of Brexit may not be substantially different from the status quo and that the impact will be less severe than many others have predicted. On the other hand, they are also clearly taking Brexit seriously enough to allocate resources and money to internal teams that are preparing to manage events as they unfold.
FTI Consulting recently completed a survey of over 2,500 business leaders in four major European economies (UK, Germany, France, Spain) during and following Phase 1 of the Brexit negotiations, which ended last December. Our goal was to gather the leaders’ thoughts about Brexit and better understand how their companies are preparing for the withdrawal.
Our findings showed that while 64 percent of firms across Europe are concerned about the UK’s departure from the EU, the vast majority are also relatively optimistic about the impact that the event will have on their business growth.
Yet we also discovered that there is much still to be done for businesses to be ready for the divorce date, leading to the question: are companies overconfident?
Some key findings in our report include:
- Timing: 75% of firms expect clarity on the UK/EU relationship by June 2018, at which point “irreversible changes” will be made to their business planning.
- What kind of Brexit: 65% of all respondents believe there will be tariff free access for goods, 52% believe the European Court of Justice will still have jurisdiction, and 59% that there will be free movement of people.
- Response of business: 85% of UK firms have established Brexit response structures, with 84% in Spain, 82% in France and 80% in Germany. However, only 40% are focused on dealing with supply chain issues and just 24% are planning to engage with or influence policy makers.
While there is no one-size-fits-all approach to preparing for Brexit, best practices can be identified to ensure that firms are well situated to address the various operational, financial and legal issues that will inevitably arise.
To read the full report about the survey findings, highlighting a range of different business structures adopted by companies across a variety of sectors in response to Brexit, click here.
Senior Managing Director, Leader of Belgium Legal Services