Trying to prepare companies for a Brexit that no-one fully understands yet has proved a complex and frustrating task for risk managers

“Just do it,” advises Adrian Clements, President AT-IPIC. “Act now, don’t react.”

While living through an era of repeated shocks, high volatility and cascading risks can encourage a cautious, risk-averse approach among managers, Clements argues that it’s a mistake to hold out for direction from the government when it comes to Brexit.

“It will take too long and be too uncertain,” he told an online audience at the Risk-!n 2020 conference.

The flipside of risk is opportunity and firms need to move fast to shape their own future. The logistics, suppliers and customers are still in place, and workers are available. “There is a real opportunity to act now,” says Clements.

Instead of the stagnation that comes with waiting for certainty firms should be focusing on boosting their productivity, pushing innovation and enhancing stakeholder value.

“Focus on the future, not on the trend,” says Clements. “Look at where you want to be and work out how to get there. Don’t look to the past and try and figure out where what has gone before will take you.”

Making a success of this approach demands a responsive risk management system, performance enhancement and effective action prioritisation.

“Regardless if you are a company, a state, a government or a country, the basic model to move forward is the same,” says Clements. “Create value for the shareholder, stabilise the bottom line while growing the top line and provide a financial control tower – a ‘lighthouse’ – that both acts as a warning and shows direction.”

Achieving these goals requires a clear vision statement to ensure everyone is aligned, a performance rating system, a control mechanism and the ability to respond rapidly to change.

Winners and losers

Joining Adrian Clements on the Risk-!n 2020 panel, Cenni Najy, vice-president of the Swiss foreign policy think tank Foraus, agrees that action is the correct approach.

He argues that his work studying the economic aftermath of the 1992 Swiss vote against joining the European Economic Area demonstrates the importance of decisive action by business in the face of Brexit.

While there was a high cost to Swiss isolation in the 1990s – measured in a five-fold hike in unemployment across the decade – those companies that survived entered the new Millennium stronger than they had been.

“British companies need to act now to increase their productivity by using the possibilities offered by technology like AI and robotics,” he says. “Branding is also crucial.”

“This is the only way forward. Companies need to invest a lot, try and innovate and go for the upper segments of the market.”

But in the long term he believes that isolationism cannot succeed. “Ultimately the UK Government will need to negotiate some kind of bilateral agreement that will bring about a return of some elements of the internal market.”