With less than six weeks until the UK referendum on EU membership only a third of IT & Telco businesses have developed a clear plan for dealing with the impact of a ‘leave vote’, according to a snapshot survey commissioned by international law firm Pinsent Masons.
The poll of senior decision makers in over 150 businesses across Britain, France and Germany – commissioned by Pinsent Masons conducted by YouGov – found that more than half, 57%, said there had been no discussion at Board level about the potential impacts of Brexit. Of the organisations which have undertaken board level discussions, 11% admit to having discussed or planned for the relocation of operations.
Pinsent Masons says that the figures reflect that, while many larger businesses have begun contingency planning for Brexit, a significant proportion have not yet contemplated the impact a vote to leave might have.
Guy Lougher, a Partner and Head of the Brexit Advisory Team at Pinsent Masons, says:
“If the UK vote is in favour of leaving the EU, there will be profound implications for all businesses irrespective of whether they operate or trade in – or with – the UK.”
“A number of economists believe a vote in favour of Brexit would create a profound economic shock. Whether one accepts such predictions or not it is hard to imagine that – at the very least – exchange rates will not be impacted.”
“The uncertainties in a Brexit scenario are so great that there may be a temptation to do nothing until the referendum result emerges. However, our advice to businesses is to start taking steps now. While one cannot protect against all risks, it is possible to identify the risk areas and start thinking about how these could be mitigated.”
“Many businesses now admit to being in denial during the Scottish referendum about how close the vote would be. People are more switched on this time, but I think find the prospect of Brexit a little overwhelming.”
Pinsent Masons says that there are a number of measures businesses can institute now in order to minimise the disruption of Brexit upon business, from assessing the number of workers likely to be impacted by freedom of movement rules to reviewing how and where customer data is held.
“There are some simple things that businesses can do. Foremost among those should be identifying any business-critical contracts and considering if they are future-proof. Any agreements which specifically reference the EU as the territory governed by the contract may lack clarity. It is likely to be easier to agree amendments to those agreements now, especially where contracts have not yet been signed, rather than after a vote when the people on the other side of the table will know that the clock is ticking”, says Lougher.
“It’s also surprising, given the potential for economic disruption, how few businesses have entered into discussions with investors and funders as to their attitudes to risk in the aftermath of a ‘leave’ vote. It would seem prudent to have those conversations now amid relatively benign conditions.”
“Having said that, it is encouraging that some businesses have started to consider what commercial opportunities might arise from a vote to leave. While this emerged as being one of the top two steps most likely to have been taken by businesses in France and Germany, this was not the case in the UK.”