05 October 2020
Our community looks at how a no trade deal scenario could impact their organisation.
This month we decided to see what The Chartered Governance Institute and The Core Partnership thought about a no trade deal scenario. When we asked the respondents how prepared their organisation was should a no trade deal happy the majority of them said the organisation was very prepared (71%). Only 9% said the organisation was not at all prepared and the remaining 20% said they did not know how prepared the organisation was.
When asked whether COVID-19 has impacted the organisations ability to deal with a no trade deal scenario, and if yes, how, one respondent said it “Should we need to move a number of our people in a no trade deal scenario into continental Europe this will prove challenging given travel restrictions and a reluctance to travel”. Other answers included: “The lack of travel has impacted where consumers purchase products so any tariff implication of a no trade deal scenario could be amplified”, “It has made internal communications and coordination more difficult”, “It has to a degree distracted and diverted time and attention from analysis of a no-deal scenario's impact, and with that, preparation” and “An added challenge in terms of staffing numbers and reduced income”. However most of the answers to this question were that it had not majorly impacted the organisations ability to deal with a no trade deal scenario with people saying: “No we have performed well through COVID and were well prepared before”, “It is just another distraction to be managed”, “Not to deal with it but it will have a significant impact on the performance of the UK market”, “The work we did on business continuity during lockdown has made us even more prepared for future challenges including a no trade deal” and “Not overly so, our exposure to the EEA is fairly limited. It will be expensive to shift the business and will be painful for clients”.
Lastly, we asked what some of the biggest effects/changes that a no trade deal scenario will have on the organisation. One respondent said: “The early days of COVID demonstrated how fragile supply chains are in the UK. Any grit - either real or just something that needs to be planned for even if it doesn't come to pass - which slows down cross-border trade is likely to be amplified as it ripples through the supply chain, especially if it triggers or is accompanied by panic buying (which in itself puts the supply chain under further pressure). In the long term I struggle to see any scenario which is beneficial to our customers; either costs will rise, or the environmental impact will rise as we trade more with distant countries rather than our neighbours”.
Other answers included: “We have established subsidiaries in Dublin which are now licensed but the volume of business going through those subsidiaries will increase”, “The inevitable worsening of the economy will impact us” and “Anything that impacts London's status as a centre for business, trade and listing venue with high standards of governance and respect for rule of law and regulatory oversight will be negative for us. No deal turns it into one giant bargaining chip”.
One respondent also poignantly said that there will be “short term impact on supply chain and potential challenges faced in shipping materials to the UK. Avoid Calais!”
If you are a company secretary or governance professional at a leading UK business, and you would like to take part in or comment on future surveys, email firstname.lastname@example.org
Conducted in association with The Core Partnership