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Brexit lesson: Focus on consequences, not cause in scenario planning Logo cgma

  Neil Amato |   Free |   AICPA and CIMA |   28 Jun 2016 |   CGMA Magazine

This article explores how the Brexit referendum underscores the need for companies to be ready for upheaval through robust scenario planning.

Topics covered:
  • Management accounting: Technical: Business planning: Planning, forecasting & budgeting, Foundational

6 Comments/Reflections

Wendy Rose

Wendy Rose Mar 2021

First Brexit then Covid you really have to think outside the box with risk scenario planning.
Gianni Platia

Gianni Platia Feb 2021

An interesting read based on the timing of the article & the position we are in now.
Hindsight is a great thing but it obviously draws questions around the impacts felt due to disruptive events in general & in particular, the failures seen by companies not seeing the importance of effective ERM. 
Mark Rennison

Mark Rennison Oct 2018

Over two years since this article was written and the position isn't really any clearer.
Thomas Sargent

Thomas Sargent Aug 2018

A good reminder to be prepared for major consequences regardless of cause.

One of the biggest risks facing our company is exchange risk.
We buy all our materials from Germany in euros and sell to the UK market in pounds

We benefited in 206 from buying forward in 2015 when the exchange rate was exceptionally high

However we did not buy forward prior to the EU referendum because we did not see the Brexit vote coming. We thought remain was a certainty.

This was clearly a poor decision and a lesson learned the hard way. We looked at the cause rather than planning for the consequence.

We also consider other major consequences such as loss of major customers and market.

Bipin Hathi

Bipin Hathi Jun 2018

There are a lot of moving parts still in Brexit as we still do not have a clear path on what will happed. This article certainly assisted in analysing on areas to focus on but without knowing the details of what will happen there is still an element pf crystal ball gazing - certainly in the indirect tax environment.