How businesses can prepare for Brexit – Michael Moore CA
Michael Moore CA, Senior Adviser on Devolution at PwC and former MP and Scottish Secretary, shares why communication, people and engagement are critical in post-referendum planning.
As a senior adviser with PwC on devolution issues, I’ve been helping clients to understand the process of devolving government, in Scotland and elsewhere in the UK, including the new devolved authorities in England and Wales.
Over the past six months, my role has broadened and I’ve been working with clients across Scotland and elsewhere, helping to prepare for the possible implications of the EU referendum even before the referendum result.
A lot of people did not anticipate the outcome of the vote on 23 June, and most businesses did not hope for it. We need to see it in the context of an era of unprecedented globalisation, the fast pace of change in technology and ideas, and a shift in relative population and influence away from Europe and North America.
The “old economy” and “old politics” are being challenged as never before. The unpredictability of political outcomes will not end any time soon – and that applies equally to what’s going on across the Atlantic.
What does it mean for business?
This is about going back to core plans and projections. Everyone needs to be testing their assumptions, regarding consumer confidence, currency and interest rate volatility and the economy in general. There is uncertainty, but there are degrees of uncertainty that we can anticipate.
Also, communication is critical at this stage. If you have overseas investors, for example, you need to know what their attitude is to your future investment plans.
There is an important job to do, talking to investors, customers and the supply chain. That’s something PwC is getting involved with, for example helping to brief owners and investors on developments in the UK.
Another key issue is people. Some employees may be concerned about their status, if they are from elsewhere in the EU. Good HR departments will already be talking to their people about this.
Many businesses have outsourced some functions, and that can be good for costs and risk management, but you need to be aware how vulnerable these may be to the new uncertainties. If you use an external call centre, for example, you need to understand what is happening there too.
Send the right signals
Also, the media will be more interested than usual in individual business responses at this time, so it is important to send out the right signals. There is also a broader piece about communicating with policy makers and sending good, clear messages, channelled through the right bodies. People in business may need to undertake a greater level of engagement than they have, previously.
Business leaders generally don’t want to be part of a political debate, but a level of “appropriate engagement” is required to communicate important issues and to help inform politicians and civil servants, who are dealing with huge changes under way for the UK and especially for Scotland, with new devolved powers and (potentially) a second referendum on independence on the way.
There’s some debate over whether the decision to leave the EU could be reversed. In the run-up to the referendum, many people relied on the assumption that a Brexit would not happen. Assuming that it won’t happen in the end would be doubling down on the same bet. For business, pretending that all this isn’t happening is simply not an option now.
Michael Moore CA is Senior Adviser on Devolution with PwC. He is a former MP for Berwickshire, Roxburgh & Selkirk and was Secretary of State for Scotland 2010-13.
Michael Moore will be speaking, with Sir Brian Souter CA, ICAS deputy president and chairman & co-founder, Stagecoach Group, at an ICAS breakfast event, “Britain Beyond Brexit”, in Edinburgh on 15 September.