With the UK EU referendum a mere six weeks away a new survey from international law firm Pinsent Masons has revealed that only a third of IT and Telco businesses have developed a clear plan for dealing with the impact of a 'leave vote'.
The research found more than half (57%) of the 150 decision makers polled said there had been no discussion at board level about the potential impacts of Brexit. What’s more, of the organizations that have carried out board level discussions, 11% admitted to debating the possible relocation of operations outside of the UK.
What these statistics show is that while larger businesses have begun contingency planning for Brexit, a significant proportion have failed to consider the impact a vote to leave might have.
Guy Lougher, a partner and head of the Brexit Advisory Team at Pinsent Masons, said:
"If the UK vote is in favor 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 favor 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."
The firm says there are several things companies can consider to help minimize 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", added Lougher.
"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."