The survey claimed the Brexit vote dampened the confidence of Britain’s bosses, with many being prepared to do some serious contingency planning. In fact, 72 per cent of the CEOs interviewed had voted in favour of “Remain” at the referendum, and now 76 per cent could be looking to relocate outside of the UK.
This is despite 69 per cent being confident that Britain’s economy would go from strength to strength.
As a result, KPMG UK chairman Simon Collins has warned in an emailed statement: “Policy makers should be really concerned about a leaching of British business abroad and should engage with bosses early to understand what assurances they can offer and closely monitor any shifts overseas.”
His words were followed with the suggestion that prime minister Theresa May will have her work cut out for her in terms of persuading companies to stay within the UK. And when asked what would encourage them to remain, the majority of CEOs demanded greater certainty over trade terms.
Among the firms open about the possibility of moving HQ was Vodafone, which said it couldn’t guarantee its headquarters in Britain if the 2017 negotiations produced an unfavourable outcome. Likewise, EasyJet is looking to gain an operating certificate for another country in the EU.
“Contingency planning is just that – a form of insurance – but it must not become ‘plan A.’ Moving headquarters abroad is radical and hits the headlines but businesses could start shifting operations abroad with little public attention. We hear it time and time again that business needs certainty.”
Contingency planing aside, what else should bosses prepare for?
- Six steps to create a business continuity plan
- Understanding your disaster recovery readiness
- The CFOs guide to IT risk
Do KPMG’s results truly spell disaster though?
“This is quite obviously problematic as the UK will be left bereft of anything for the populace to do in order to scrape a living,” Tim Worstall, a fellow at the Adam Smith Institute in London, has said. “Or, we can put it as CEOs doing their job.”
He explained that a CEOs job was to consider the strategic decisions a company had to make.
“Note the report is not stating 76 per cent of CEOs are going to take anything out of the UK. Rather that they are considering it. And the important question here is not that they are but instead, why are 24 per cent not doing the sums and considering the idea given the change in circumstances? Because it is considering these things which is the job of a CEO. The decision they reach after having considered it is a little different of course.”
Meanwhile, evidence from neuroscience shows business managers are living a “rationality facade” by using strategy tools and are missing a key ingredient in decision making: emotion.
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