There’s fear in boardrooms so why are British CEOs silent on Brexit?

Have you been keeping up with the qualms that business leaders have aired about Brexit?

Billionaire Michael Bloomberg once said it was "the dumbest thing any country had ever done", until the US "Trumped it". Sir Richard Branson, another billionaire, said it could be "the biggest shot in the foot the British people have ever done to themselves".

The head of Goldman Sachs, Lloyd Blankfein, has suggested it would make sense to have a second vote on "a decision so monumental and irreversible".

The curious thing about these outspoken doubters is not that they exist but that they have been so rare. Behind closed doors, the uncertain nature of the UK’s departure from the EU has been a source of rising concern in many boardrooms since voters opted to leave in the June 2016 referendum.

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Yet until Thursday – when the Airbus aerospace group went public with a jolting warning that the "catastrophic" impact of a bad exit could force it to scale back in the UK – much of this unease has stayed under wraps. As one well-known executive told me recently, there has been an "extraordinary lack of serious opposition from the business community".

This reticence has been all the more striking because it has come at a time when US chief executives have been notably willing to condemn the White House, often over issues that pose a far less immediate threat to their businesses than Brexit may for some UK firms.

US president Donald Trump’s decision to leave the Paris climate accord and curb travellers from certain countries prompted open disapproval from a slew of top executives. Anger over Mr Trump’s initially tepid response to violence at a rally of white supremacists in Charlottesville was so profound that two high-level business advisory groups fell apart after chief executives walked away in protest.

Comparisons

Direct comparisons with the UK are fraught, but the contrast is still stark. As the March 2019 deadline for Brexit is nearing without a deal on precisely what trade rules lie ahead, I have lost count of the conversations I have had with UK company heads who privately despair of the uncertainty. They have used words such as “infuriating” and “horrific” to describe ministers’ refusal to listen to their concerns about what could happen if Britain crashes out of the EU without a deal, or ends up with a pact so unworkable it will make smooth trade impossible.

Last week, a prominent business leader told me he had just spoken to a chief executive who was so worried about the risks to his business and its supply chain that he had become quite emotional. “He was near tears,” this man said. Yet that chief executive has never made his real fears public.

Like so many others, he has left it to industry bodies such as the CBI to put the case. The CBI has done this, buoyed by the knowledge that, ahead of the 2016 Brexit referendum, 80 per cent of its members thought staying in the EU would be best for their companies and the wider economy. Yet its voice inevitably lacks the punch of a big company, as Airbus ably demonstrated last week.

As worries have deepened, a few executives have begun to publicly urge prime minister Theresa May to at least keep the UK in the EU customs union after Brexit, a move she has so far ruled out.

So why aren’t more executives going public? Those I have spoken to all point to the same set of reasons: no one wants to alarm shareholders and employees, nor alienate customers who voted to leave the EU. Many think the public mistrusts business so much that complaints will be impotent or counter-productive. There is also a surprisingly widespread belief that companies depending on government contracts or regulation risk retaliation.

"Falling out with the government can be quite painful," says John Neill, chief executive of Unipart, a large manufacturing and logistics business. None of this has stopped Mr Neill from claiming hardline Brexiters are in danger of "destroying the British car industry". Nor should it.

If executives think the future of their companies is at risk from an unworkable Brexit, they should speak out now. The longer Ms May’s riven government takes to strike a deal, the more obvious it must be that silence is the riskier option.

– The Financial Times Limited 2018