How well prepared for Brexit are corporate governance departments?

More than 18 months has passed since the EU Referendum returned a Leave verdict, and many businesses are still uncertain over how Brexit will unfold.


Nevertheless, a recent YouGov poll found that 52 per cent of the general public remain in favour of proceeding with Brexit, while just 32 per cent want to reverse the process.


Now that the initial shock is over and negotiations are progressing (albeit slowly), are businesses prepared for a post-Brexit world? And, specifically, how are corporate governance departments planning for the future?

Firms face scenario-planning challenges

More than half (57 per cent) of organisations have examined Brexit scenarios to see how they could potentially impact their operations, according to Confederation of British Industry figures.


Of the firms that have attempted to identify lucrative Brexit opportunities, about half have found them. However, a lack of information is holding back a proactive approach, with 94 per cent of businesses stating they don’t have enough data to formulate effective plans.


Over three-quarters of respondents said the sheer number of potential scenarios is giving them a headache, while 48 per cent claimed the cost of contingency planning was prohibitive.

Are corporate governance departments ready?

So, it’s a mixed bag of results for British businesses in general, but what about corporate governance departments?


Barclay Simpson’s latest Market Reports provide insight into the progress that teams are making in their Brexit preparations.

Risk management

Risk managers are significantly ahead of the curve when it comes to Brexit preparations, with 77 per cent having already begun contingency planning.


This is likely due to the significant contribution that EU citizens make to UK risk departments. Our employer survey found that nearly one-third (32 per cent) of risk employees in the country are originally from the EU.


Furthermore, three in every ten risk management employers are considering opening up European offices as part of their Brexit preparations. The figure rises substantially among investment banks, with 61 per cent planning an EU-based site.


Compliance isn’t far behind risk in terms of Brexit contingency planning. Again, over three-quarters (76 per cent) have started examining how their business will be affected when the UK splits from the rest Europe.


While EU citizens comprise a lower proportion of UK compliance teams than risk managers (16 per cent), they are still vitally important to the effectiveness of departments across the country.


The uncertainty surrounding Brexit had an impact on recruitment in 2017, but this could pick up this year now there is greater clarity regarding citizens’ rights. Nearly 70 per cent of compliance hiring managers said they intend to recruit in 2018, although this is highly dependent on sector.

Internal audit

Compared to risk and compliance, internal audit is taking more of a ‘wait and see’ approach to Brexit. Slightly more than half (51 per cent) are considering post-Brexit options.


Corporate and investment banks are the most likely to be weighing up different scenarios (82 per cent), while only 27 per cent of consultancy auditing departments have begun doing so.


Some 16 per cent of auditing contingency plans involve setting up a European office. The Republic of Ireland and the Benelux countries are the most popular destinations, picking up 33 per cent of the vote each, with Germany and France (both 28 per cent) close behind.


Brexit has had already had a substantial impact on many in-house legal departments, with 58 per cent claiming it is affecting their workloads. Many Brexit strategy teams are led by, or have heavy input from, legal teams.

That said, Brexit is just one of a number of plates that in-house lawyers must keep spinning in 2018. When asked about their current concerns, only eight per cent cited Brexit, placing it in fifth behind data protection (23 per cent), EU regulation (22 per cent), FCA regulation (17 per cent) and advancing technology (13 per cent).

Legal departments are likely awaiting more concrete news on Brexit and focusing their efforts on the GDPR, MiFID II and other recently implemented or upcoming regulations.

Security and resilience 

Brexit contingency planning is a lower priority for security and resilience departments than other corporate governance teams, but 42 per cent are still making preparations.


Around 16 per cent of security and resilience staff are EU citizens, which rises to 22 per cent for cyber and information security. Given there is a shortage of qualified candidates in cyber security, organisations may need to expand their search for talent outside the UK more and more in the future.


However, Brexit is unlikely to be a major blip on the security and resilience radar with the GDPR just a couple of months away. This may have changed by the time we compile our mid-year reports later in 2018.

Will Brexit affect recruitment in 2018?

Last year, our research suggested that Brexit was hindering corporate governance recruitment, with EU employees hesitant to accept jobs in Britain until further details on workers’ futures were confirmed.


December brought fresh hope that the rights of UK citizens in the EU (and vice versa) will be assured, and this could have a positive knock-on effect for hiring intentions and employee willingness to move abroad.


It’s still too early to tell, particularly with negotiations ongoing, but we expect recruitment to stabilise as more details are agreed between the UK and the EU.


If you would like to discuss your Brexit contingency planning or wider recruitment requirements, please contact Barclay Simpson. For credit risk recruitment specifically, phone 0207 936 2601 or email


Our Market Reports combine our review of the prevailing conditions in the corporate governance recruitment market with the results of our latest employer survey.

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