Brexit: a practical response strategy
Inform: briefing internal and external stakeholders
The UK has voted in a referendum to leave the European Union.
The outcome of the referendum and the on-going political debate continues to
receive significant profile. Whilst most of the practical consequences for
business are currently uncertain, they are potentially significant.
In managing the effect of the referendum result and preparing for the potential
next steps it is important to ensure both internal and external stakeholders are
accurately informed.
This paper summarizes some of the key points to address in any
communications strategy.
Why inform?
A practical response strategy
Brexit will potentially have a significant impact on any business with
operations, customers or suppliers in the UK or EU. Ensuring communication
of the right information and analysis (and where appropriate opinions) is
therefore important for a number of reasons:
This note addresses one element of
a practical strategy to respond to
Brexit. Your overall strategy should
cover the following key elements.
–– The Brexit process could create significant risks for many businesses.
Those risks may include loss of operational continuity, additional
costs (for example in the form of new tariffs or the requirements of
new regulatory or legal regimes), loss or redeployment of key staff and
damage to supply or distribution chains. It is important that these risks
are identified, scrutinized, mitigated against and progress monitored;
Organize a “Brexit Taskforce”
to capture insight from across
your business.
–– Whilst there is significant uncertainty as to the details of the withdrawal
process, timing and the eventual shape of the UK’s relationship with the
EU (and any changes to the EU itself), it is important to start preparing.
This means ensuring that the range of possible outcomes is understood
so that an initial assessment can be made as the potential impact on
various aspects of your business and possible mitigation strategies;
–– The referendum result, the political fallout and media reporting have
created significant concern and uncertainty. Whilst this cannot be
eliminated, it is important to ensure people have the facts, to provide
reassurance where possible and appropriate, to counteract the
potentially damaging impact of rumor and misinformation;
–– The Brexit process is fluid and the outcome depends on the position
taken by a range of players including the British Government,
governments of other EU Member States and the European
Commission. Issues still to be determined range from the macro (will
the UK continue to have a “special relationship” with the EU) to the
micro (how will very specific activities be addressed in regulation and
trade). Well-informed businesses have an opportunity to try to influence
the outcome in areas which matter to them; and
–– Brexit is not simply a risk to business. There are also potential
opportunities for business which include capitalizing on exchange rate
movements, possibilities to restructure for the better, and the prospect
of new UK free trade agreements with non-EU countries. A proper
understanding of the landscape is important in order to understand how
to take full advantage of the opportunities.
Inform your Board and wider
business of the possible implications
of Brexit and the approach your
business is taking to it.
Analyze potential impacts or
changes that your business would
like to drive.
Capitalize on opportunities
generated by uncertainty and change.
Prepare by taking steps to mitigate
potential risks and developing a
detailed plan to move quickly as
clarity emerges.
Monitor developing thinking in
London, Brussels and elsewhere.
Engage with government in the UK,
EU and beyond, as well as with other
key stakeholders.
Further details on this overall
practical response strategy are
available in our Brexit toolkit at
hoganlovells.com/brexit
Who to talk to?
Given the breadth of the potential impacts of
Brexit you should consider briefing a wide range of
stakeholders including:
–– The Board of Directors and key management;
–– Immediate issues to focus on: the risks and
opportunities of uncertainty and market turbulence
individuals’ immigration status and business’s legal
obligations are currently unchanged; can existing
contracts be revisited and should new contracts
contain “Brexit clauses” (Brexit clauses);
–– Shareholders, lenders and other finance parties
particularly if Brexit or the Brexit process may
have a material impact on your business or create
material risks;
–– Areas of your business which could be directly
or indirectly impacted and need to be assessed
in preparation for possible outcomes (Analyze: a
Brexit health check): potential regulatory and legal
changes; new tariff and non-tariff barriers to UK/EU
trade; lost access to current EU third country free
trade agreements benefitting the UK;
–– Industry bodies and partners with whom you may
share common interests having due regard to the
application of competition law, particularly when
talking to competitors (Trade associations and
competition law);
–– Possible impacts on stakeholders and third parties,
whom you may need to inform or engage on risks,
provide reassurance or commence discussions
to agree potential mitigations: shareholders;
employees, lenders, customers, and suppliers;
–– Suppliers and customers who may be directly
affected in ways which might indirectly affect you
or who may be affected through their relationships
with you; and
–– Areas of opportunity which Brexit may create for
your business: new M&A and deal opportunities
(Capitalize) and broader trade outside Europe;
–– Employees and contractors (particularly those who
may be personally affected by Brexit);
–– Policymakers, regulators and wider opinion formers
who may be able to shape the impact of Brexit and
the Brexit process on your business.
Whilst the information and approach for each of these
groups will vary, it is important to ensure consistency
in you overall approach.
What to say?
Depending on the audience, there are a range of issues
you need to consider covering including:
–– The facts about what has (and has not) happened:
the UK remains a member of the EU; no formal
process to leave has started; no legal changes have
yet happened (Vote is Leave...the journey begins —
unravelling the uncertainty).
–– What we know about the next steps: the only legally
defined exit process (Brexit — What now? The legal
process of leaving); possible models for the UK’s
future relationship with the EU (Possible models for
the UK/EU relationship); the potential impact on
UK law (further information to follow on
www.hoganlovells.com/brexit);
–– Opportunities to influence the outcome of the
Brexit process or the future legal and regulatory
landscape (Engage: policy engagement): ensuring
policymakers and regulators prioritise your areas
of concern; mitigating potential change; securing
optimal future policy development.
Our Brexit team is experienced in preparing briefings
for both internal and external stakeholders. Our
industry specialists (Brexit – why Hogan Lovells?) can
help in shaping the key messages outlined in this paper
to your sector.
For more information, or advice on developing
your practical response strategy contact your usual
Hogan Lovells contact or email
[email protected]
For more resources on readying your business for
Brexit, and our latest thinking, visit our Brexit Hub at:
www.hoganlovells.com/brexit
Follow us on Twitter: @HLBrexit
Join in the conversation #Brexiteffect
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