Brexit divides risk perception and confidence levels in Europe

Economic risk is causing businesses executives around the world most concern, also ranking as the top threat in the UK and second in continental Europe, according to new research from CNA Hardy. Meanwhile, executives in Europe are most confident of all regions about growth prospects, with those in the UK the least upbeat as Brexit takes its toll. CNA Hardy’s latest Risk and Confidence Survey polled 1,500 business leaders at multinational firms around the world and with operations in Europe. It found that risk levels are broadly consistent around the globe, with 82% of business leaders feeling they operate in a moderate to high risk environment. Economic risk is the primary concern for 22% of business leaders worldwide, ahead of cyber (19%), technology (14%) and political risk (13%). Economic risk is perceived as the second biggest risk in continental Europe on 16%, with cyber top on 17%. Economic risk is the leading concern in the UK on 23%, followed by political risk on 16% as fears over Brexit continue. CNA Hardy said the research shows that companies must get on top of interconnected risks and need to new skills to achieve this. “In our view, companies need more than the traditional financial and legal skills if they are to manage these risks. They also need a broader, more diverse range of skills on the board to help identify and manage the threats to brand reputation posed, for example, by failure to prepare adequately for Brexit or a disruption to the supply chain caused by a cyberattack. Organisations also need to think about embedding a more proactive approach to loss and risk prevention,” it said. The survey also reveals that less than two thirds (59%) of business executives worldwide are currently confident about the ability of their business to grow and prosper. However, there are substantial regional variations, with Brexit playing its part in Europe. Some 70% of business leaders in continental Europe are confident about growth, well ahead of those in North America (64%), Asia Pacific (53%) and, finally, the UK (39%). Dave Brosnan, CEO of CNA Hardy, commented: “Economic risk is top of the leaderboard in every region bar continental Europe, and it hits business confidence hardest where organisations feel they have most to lose – namely in the UK where Brexit is paralysing decision-making, and in Asia where trade wars are distorting trade patterns.” “By contrast, in North America and continental Europe, comparatively strong economic growth means business leaders are far more confident, despite the overall sense that they are operating in a moderate- to high-risk environment,” he added. In line with high confidence levels, continental Europe’s business leaders have the most positive view on risk. Three quarters (74%) feel they operate in a moderate- to high-risk environment. Stuart Middleton, CEO of CNA Hardy Europe, commented: “The Channel between Europe and the UK is narrow, but the gulf in confidence between the two markets is enormous. Continental European businesses have the luxury of balancing cyber, technology and the economy as their top concerns. In the UK, it’s economic risk that is dominating the c-suite risk agenda and sucking up all the oxygen in the boardroom.” Continental Europe-based businesses are also much more likely to be spending on business fundamentals than UK companies. The gap in technology investment, for example, is 18% and for hiring temporary staff is 25%.

Brexit divides risk perception and confidence levels in Europe

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