FTSE 350 CFOs really don't want to leave the EU

They're not taking a Brexit lightly and think the EU referendum is the biggest risk currently facing businesses.

by Rebecca Smith
Last Updated: 08 Apr 2016

Many businesses have been keeping schtum on the in/out debate (some more forcefully than others), for fear of being too political. But the upcoming EU referendum is playing on everyone’s minds, according to Deloitte’s survey of 120 FTSE 350 CFOs.

The execs ranked it as the biggest risk facing businesses, ahead of economic weakness in the eurozone, weak demand in the UK and the prospect of higher interest rates. That’s probably partly because the Brexit campaign has been picking up steam and the outcome of the referendum seems increasingly tricky to predict, even if the 'in' supporters currently have the edge.

Nobody quite knows what a British exit from the EU would actually mean, particularly in terms of changing rules and regulations, so firms would be dealing with a great deal of unchartered territory if Britain's voters decide to head for the door. 

Uncertainty can be a big burden for companies and even just the prospect of the referendum on the horizon has put the brakes on much business activity. David Sproul, senior partner and CEO of Deloitte, said, ‘We are already seeing the unsettling effect of the referendum on business sentiment.’ There has, he said, been ‘a marked slowdown in M&A activity as businesses put plans on hold for now’.

Some 83% of CFOs said the level of uncertainty facing their firm was above normal, high or very high – which was up from 64% in the Q4 equivalent survey.  Even so, just over a quarter said their companies were making contingency plans. Over half were either confident of Britain remaining in the EU (or perhaps can’t yet bear the thought of having to prepare for a Brexit) as they said they hadn’t made any plans.

Despite relatively few firms taking vocal public stances, surveys such as this one suggest many execs are keener to stay in the EU than they might be letting on. The CFOs listed boosting UK exports, attracting foreign direct investment and developing the UK’s influence and connections globally as big benefits for continuing EU membership. Three quarters said they favour staying in the EU, and just 8% said they wanted to leave. 

So while the outward appearance may be careful indifference, it seems underneath the surface businesses are beginning to sweat as June 23 draws closer.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

When spying on your staff backfires

As Barclays' recently-scrapped tracking software shows, snooping on your colleagues is never a good idea....

A CEO’s guide to smart decision-making

You spend enough time doing it, but have you ever thought about how you do...

What Tinder can teach you about recruitment

How to make sure top talent swipes right on your business.

An Orwellian nightmare for mice: Pest control in the digital age

Case study: Rentokil’s smart mouse traps use real-time surveillance, transforming the company’s service offer.

Public failure can be the best thing that happens to you

But too often businesses stigmatise it.

Andrew Strauss: Leadership lessons from an international cricket captain

"It's more important to make the decision right than make the right decision."