COMPANY BOSSES are considering relocating operations or headquarters away from the UK following the country’s decision to leave the European Union.
KPMG’s survey of chief executives of companies with revenue between £100m and £1bn found that both in short term (the next year) and the medium term (the next three years) the majority are confident about the future growth of the country, the global economy and their own businesses. However, over half believe the UK’s ability to do effective business will be hindered after leaving the EU.
Simon Collins, KPMG UK chairman, commented: “[CEO’s] are confident about their own and the UK’s future growth prospects – a confidence reinforced in recent days by a number of important economic indicators. However, CEOs are reacting to the prevailing uncertainty with contingency planning. Over half believe the UK’s ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption.”
Collins continued: “We have seen international clients who had been considering basing European headquarters in the UK, opt for Ireland instead, this effect could be exaggerated by UK companies moving. Contingency planning is a form of insurance, but it must not become ‘plan A’. Moving headquarters abroad is radical and hits the headlines. Policy makers should be really concerned about a leaching of British business abroad and should engage with business early. Equally, businesses should be sharing on the ground experiences to convene a unified voice into government.”
The majority of CEOs felt that a division in society between ‘big business’ and the general public contributed to the EU referendum result, including over a third who believed this ‘to a great extent’. A high proportion felt that UK big business has a responsibility to re-establish trust and communication with the general public, following the referendum vote.
Collins concluded: “Business leaders feel the division of the referendum vote, the trust broken by the 2008 crash is far from repaired. Every CEO I know is worried about this and determined to rebuild trust. One way is in recruitment. Many CEOs leadership teams are including a broader section of society through apprenticeship schemes. Repairing trust takes time but will to change is high.”