When is it time to start thinking how the EU Referendum could affect your business?
In the UK, the Prime Minister David Cameron is expected to hold an EU Referendum by the end of 2017, with some, including David Lidington, the Europe minister, believing it could be as early May 2016 as UK-Brussels dialogue appears to be picking up pace.
Decided by millions of UK voters, the single question "Do you want the UK to be part of the European Union?" clearly has potential connotations for British businesses and overall trade relations with the continent, although to what degree, no one really knows just yet.
Indeed, even though we are at least 12 months away from the EU Referendum, and despite many believing that Britain will remain part of the EU after the referendum, several large companies have already began to look at the risk that Britain's departure from the EU could impart on their organisations. On the flip side, several business leaders have stated that Britain can "go it alone", and trade would not be affected.
Earlier this week, Deutsche Bank claimed they would abandon Britain if the UK was to leave the EU, and then a couple of days later, Airbus followed suit. A month prior to this, HSBC, Europe's largest bank was talking of relocating their offices out of London, with many believing this was down to a possible EU exit.
On the contrary, the Tory Donor, Lord Bamford, told the BBC the UK could exist "peacefully and sensibly" on its own and JCB chief executive Graeme Macdonald said that Britain should leave the EU, claiming "it would not make a blind bit of difference for trade" and "There has been far too much scaremongering about things like jobs. I don't think it's in anyone's interest to stop trade. I don't think we or Brussels will put up trade barriers."
So it is clear that many influential companies and individuals are already voicing their thoughts, and opinions are certainly divided. However, whichever way you look at it, exit from the EU could affect your business to some degree, from small administrative matters, to large-scale trade - obviously depending on the size of your organisation and the industry you operate in. Although most people, at this stage at least, do not believe the millions of UK voters will back UK abandonment from the EU, there is always a chance, so now might just be the time to start thinking about how the EU Referendum could affect your business.
You might be wondering where you start when trying to assess the potential impact of EU exit on your business. This is where Enterprise Risk Management (ERM) comes in. ERM splits risk events in your organisation into five key parameters: Operations risk, compliance risk, strategic risk, opportunity risk and financial risk. If you systematically go through each of these, you should be able to identify and control all risks that the EU Referendum could impart on your business.
How will UK withdrawal from the EU affect your day to day business activities?
How will exit from the EU affect any industry-specific, local and national laws and regulations your company is subject to?
How will Britian's abandonment from the EU impact on any long term business plans you have for your organisation, especially ones involving mainland Europe?
Where can exit from the European Union inhibit your business growth and expansion and will it hinder any value-generating liaisons with continental business partners?
How will Britain leaving the EU affect your financial affairs e.g. creditors, debtors and investors?
With the European Union Referendum happening within the next 18 months, or possibly even 12 months, it is recommended you start looking now at how EU exit could affect your business. With parties from both sides of the argument voicing their concerns, there is an apparent stalemate as to agreement on whether UK business will be affected by EU withdrawal. The fact is though, only you, the owner of your own business, with your own operating envelopes and practises can know how EU exit could affect you. You can start addressing how the EU Referendum could impact your business by going through the five steps of Enterprise Risk Management: Operations risk, compliance risk, opportunity risk, financial risk and strategic risk.