Could businesses in Britain be setting themselves up for a fall by underestimating the effect of potential Scottish independence on the economic recovery?
No one can have missed the deluge of leading broadcast stories and press headlines in response to the most recent polls on the Scottish Independence vote and the apparent swing in favour of the “Yes” vote in the last few days. As someone who specialises in supporting organisations in their management of dynamic business risk and crisis exposure, I was interested to investigate the extent to which UK businesses have been taking into account the potential risks of a ‘Yes’ vote on 18th September.
Risk Reporting Survey
A survey by Corpress LLP, found that businesses in the rest of the UK are not taking into account the potential risks of the vote going to a “Yes” in less than two weeks from now.
All companies record their risks and publish them in annual reports, so the indifference to the impending referendum could mean one of two things:
- Some believe losing Scotland will have little impact on UK-based organisations, with no risk involved – even UK government departments like the DECC neglect to refer to the vote in their annual reports
- Or the alternative is that businesses are not understanding and leveraging the substantial risk to their own advantage.
Indeed, the picture is slightly different north of the border. In a survey of Scottish-based companies, Corpress found a mix of risk reporting on independence in their annual reports, with the majority of those surveyed making some reference to reviewing the impacts. With issues of credit ratings, pensions, relationships with European markets and, of course, that all-important currency debate, should the rest of the UK be taking the prospect of Scottish independence more seriously when it comes to risk management?
Managing The Uncertainty
There is sufficient evidence that a ‘Yes’ vote in Scotland could derail the UK’s economic recovery. It could impact business’ operational and administrative costs, create supply chain problems, and significantly reduce energy security in the remainder of Britain – England, Wales and Northern Ireland.
Businesses can combat this uncertainty with horizon scanning, scenario testing and risk workshops to seek opportunity and protect their business from the potential crisis of a ‘Yes’ vote.
At Corpress, we focus on the integration of risk and response capability, helping to build awareness of how risks affect an organisation and how everyone has a key role to play when the unexpected impacts normal operations. With our focused, easy-to-run and highly effective programs, businesses can build much-needed resilience and demystify the risk that could have derailed them.
Disruption to energy supplies has a profound effect on business and energy security has been deemed one of the biggest risks of an independent Scotland. With a deteriorating situation in Ukraine, there is a potential crisis trigger for Europe’s energy supplies. In the case of a ‘Yes’ vote, any crisis situations in Ukraine could mean that, while Scotland’s lights are shining brightly, the rest of the UK may struggle.
Whatever the outcome of the referendum, there will be winners and losers. The winners in any scenario are the ones who have researched and understood the risks, and assessed the possibilities, leveraging the risk for their own gain. The losers can learn from this lesson – that risk management and crisis planning is a crucial element of business; they won’t make the same mistake twice.