Hitting the Panic Button on Brexit

The collapse that had been widely feared has not happened, and economic indicators are chugging along fine. But Britain’s industry chiefs are still fretting over Brexit—and in a big very way. 

A new Korn Ferry Boardroom Pulse survey of the chiefs of Britain’s biggest public companies shows an overwhelming concern about leaving the European Union next year and the government’s shutting business views out during recent talks. More importantly, more than three in four (76%) agreed with the statement that leaving the EU Customs Union would be a “profound mistake economically” for Britain. “Probably our biggest economic disaster since World War II,” said one participant. 

The customs union, which is the equivalent of a free-trade area, would allow for the untaxed trade in goods and services between all member countries. However, the ruling conservative government, led by Prime Minister Theresa May, has said that joining the customs union isn’t needed, opting instead for a so-called “hard Brexit” with the country firmly severing links with the bloc rather than maintaining some sort of ongoing connection. 

When the question of how Britain would fare when apart from its European neighbors got switched around, the outlook remained almost as bleak. In response to whether participants agreed with former Goldman Sachs economist Jim O’Neill, that “gloomy predictions of the possible effects of Brexit are likely to ‘dwarfed’ by strong global growth,” 56% said no, and a further one in four (24%) said they weren’t sure.

Still, experts have said that smart UK business chiefs, whatever their outlook, have long since been planning and tweaking their business strategies. And that includes reviewing talent. “Companies are trying to figure out the required skills for new board members—and boards as a whole—in a post-Brexit environment,” says Dominic Schofield, a senior client partner in Korn Ferry’s Europe, Middle East and Africa Board and CEO practice. 

The research, which was conducted in April, asked the chairpersons of firms in the FTSE 100 stock index whether they agreed or disagreed with certain statements. In it, some 68% said the government had not sought their opinions on next steps for Brexit, suggesting a continued lack of private-public sector alignment. “Only in a very indirect and obscure way,” said one participant.