Are finance directors and CFOs worried about Brexit?
Despite the recent chaos, the UK is still set to formally leave the European Union on Friday 29 March 2019.
Although the transition period has been decided for 31 December 2020, the relationship of UK with the EU seems unclear after Brexit. There is a possibility that a withdrawal agreement may not be signed before the Brexit day arrives, in which case, there will be no transitional period.
This uncertainty is creating concerns and fears for finance directors and chief financial officers who are forecasting hypothetical scenarios for their businesses.
If the transition period happens, the UK would have a period of 21 months to continue its trade operations i.e. they can keep up with the free flow of goods, services, people, and capital with the EU member states.
But, if the withdrawal agreement does not happen, it will severely affect businesses, which all business leaders are preparing to deal with.
Finance directors and chief financial officers of some of the leading UK companies have voiced their concerns about the possibility of a ‘no-deal Brexit', believing it would mean no investment opportunities for business in the UK.
Several financial leaders have come forward and are now pressuring the government to listen to their views and to ensure a withdrawal agreement takes place.
One of the biggest concerns for finance leaders is controlling the costs, followed by growth opportunities. Recruitment and retention fall in the third place among the most pressing issues for CFOs and FDs in the current state of affairs.
FDs’ and CFOs’ everyday concerns may well be affected by Brexit. These include:
1. Controlling the cost
2. Focusing on growing the revenues
3. Making correct recruitment decisions
4. Retaining existing employees
5. Improving cyber-security
6. Focusing on e-commerce and other digital mediums
7. Introducing new products and services
8. Keeping a keen eye on regulatory issues
9. Proper communication with corporate governance
10. Fraud prevention
Although politicians are optimistic about striking a deal, FDs and CFOs are now preparing themselves for the impact of a “no deal Brexit”. Whether the transition period happens or not, one thing is clear: the operational costs of the majority of the businesses in the UK will rise once Brexit happens.
It will largely affect businesses that have operations, suppliers, or customers in EU states.
It is also forecasted that the British pound will fluctuate massively and heavy duties and taxes on the transfer of goods will be imposed. Additionally, the UK will now need to pay visa fees to secure talent.
All of these are some of the factors that will simply disrupt the supply chain for UK based companies, resulting in an increase in the cost of operations, something which deeply concerns the financial leaders.
As per the latest survey, CFOs are now working actively with treasuries to minimize their costs and strategically address this geopolitical uncertainty of Brexit.
If you are a business owner looking to hire a great FD that will carry your through the Brexit contact us. If you are an FD looking for your career move, register with us.
Date Posted: January 18th 2019
Posted By: Phil Scott