Late on Friday night in Brussels, European leaders agreed on a package they hope will keep the United Kingdom as part of the EU. The British people will now be asked whether they want to stay in the EU or leave, in a referendum expected in June. Whilst the shape of the deal is now settled, if the UK votes to leave the effects are likely to be felt immediately and the decision will raise more questions than it answers.
Companies need to make the most of the little time they have to understand the immediate and long-term regulatory and economic impact that any vote to leave may have on their business and how they can help secure the best outcome as the UK and the EU negotiate a new relationship for the future.
Planning ahead: key questions to consider
There are many uncertainties surrounding the UK’s referendum on whether to remain in the European Union. However one thing is certain: if the vote is for the UK to leave the EU, the impacts will be felt broadly, both in the UK and in the remaining EU.
As the referendum approaches, all companies which operate in or do business with the UK should be asking themselves some questions:
- Have we identified the key potential changes relevant to our business? Will those changes be an opportunity for us or a risk (or both)?
- Will those changes equally affect our competitors?
- Are there any steps we could or should be taking in advance (or immediately after a vote) to mitigate adverse impacts?
- If the result is for the UK to leave the EU, will we be able to reassure our investors that we have considered and taken measures to best prepare for any anticipated risks? How will the legal and economic uncertainty of the negotiation period impact on us?
- If the vote is for the UK to leave the EU, what should the UK’s and EU’s priorities be in the negotiation of UK/EU future relations for our sector? Are there particular EU laws which it would be important to us that the UK should retain or replace?
- Do we rely on any EU free trade agreements with third countries, and how would we be affected if the UK ceased to benefit from them?
With Brexit being such a prominent and forseeable event which could affect any business operating in the UK, assessing the opportunities and risks that Brexit could create is of paramount importance. These are among the issues on which all companies should have a position for consideration at Boards and audit/risk committees as well as, if necessary, with investors.