Uncertain business environment contributing to poor decision-making with Brexit posing greatest risk to business
91% of business leaders believe that Brexit is the greatest current risk facing companies in Ireland according to a new IoD report, Leadership Challenges in an Uncertain Age, released today.
- 91% of business leaders say Brexit greatest current risk to companies in Ireland
- 40% believe Brexit will have a negative impact on their business; 1 in 4 concerned about a hard border with Northern Ireland
- Majority of business leaders surveyed concerned about global and domestic economic and political uncertainty
- 1 in 4 say uncertain business environment has contributed to poor decision-making in Ireland’s boardrooms
Based on a survey with 250 members of the Institute of Directors in Ireland including chief executives, managing directors, executive and non-executive directors, examining leadership challenges in a time of uncertainty*, the report found that 2 in 5 (40%) business leaders surveyed believe that Brexit will have a negative impact on their business, while the same proportion (42%) say that it is too early to tell what the likely impact will be.
One-third (31%) of those surveyed are concerned about business growth prospects as a result of Brexit while 37% cite concerns around commercial implications including the impact on competitiveness and trade.
The largest proportion (51%) quote exchange rate volatility as the main aspect of Brexit causing them concern with 38% concerned about a troubled transition and almost a quarter (23%) of business leaders concerned about a hard border with Northern Ireland.
Business risks and priorities
Despite concerns about Brexit, two-thirds (65%) of business leaders surveyed say their business is performing better this year when compared to the same time last year while 23% report no change in business performance. However, economic and political uncertainty is a significant risk factor according to those surveyed. 89% of business leaders say global uncertainty is a moderate to high risk to companies in Ireland with 68% citing domestic uncertainty as cause for concern.
Commenting, Maura Quinn, Chief Executive, Institute of Directors in Ireland, said:
“The current operating environment is full of uncertainty and that is having an impact on directors and business leaders as they navigate through a wide range of daily pressures and challenges both inside and outside of the boardroom.
“Notwithstanding these pressures, businesses leaders are more confident about business performance compared to this time last year and are focused in terms of priorities for the year ahead.”
From a business perspective, the ability to source and retain talent is considered a moderate to high risk factor by 82% of directors while 68% list digital transformation and regulatory compliance and governance as key risks to companies in Ireland.
The main priorities for businesses in the year ahead include market diversification (54%), talent sourcing and retention / skills development (49%), information technology (37%) and research and development and innovation (33%).
Impact on decision-making
A quarter (25%) of directors surveyed admit that the pressure of an uncertain business environment has contributed to poor decision-making at board level.
In terms of the main barriers to effective decision-making in the boardroom, directors cite insufficient long-term strategic planning (44%), inadequate expertise or skillset on the board (35%), dominant chairperson / insufficient challenge on the board (29%) and, reluctance to adopt alternative approaches (20%).
Over half (57%) of business leaders surveyed say that the demands of compliance oversight and regulation at the expense of strategy is a moderate to significant challenge to performing their role and 44% say keeping abreast of regulatory change is a challenge.
However, in terms of the General Data Protection Regulation (GDPR), business leaders are in a good position with 70% of those surveyed saying their organisation is moderately to extremely prepared for the GDPR.
The always-on culture, being continually accessible and connected to technology, is a significant challenge for 51% of business leaders surveyed with 61% reporting that it has a negative impact on their stress levels.
In terms of personal concerns, adequate pension provision is a concern for 45% of business leaders surveyed, while 27% are concerned about their children’s prospects and caring for elderly parents now and into the future.
78% of business leaders surveyed say they are slightly to extremely concerned about retirement with maintaining standard of living (28%), financial security (25%), potential medical costs (24%) and remaining vital and productive (24%) key causes of concern.
*Online survey conducted between 7th - 18th September 2017 with a sample of 250 members of the Institute of Directors in Ireland.
Survey Base Numbers: 38% chief executives / managing directors, 17% executive directors, 15% non-executive directors, 11% chairpersons, 14% senior managers / heads of function and 4% self-employed. 75% male, 25% female.
Company Types: 79% private sector, 11% not-for-profit, 9% state or semi-state sector, 1% co-operative / other
Industry Sector: 23% financial services industry, 22% life sciences / consumer products, 18% professional services, 11% technology, media and telecommunications, 19% other (charity, construction, food and agriculture, entertainment etc)