Dealing with unknowns is part of the territory as a risk manager – it is integral to the job. But the level of uncertainty surrounding the possible outcomes and timings of Brexit is proving a huge challenge for even the most seasoned risk professionals.

The range of scenarios businesses must prepare for is vast. This is a huge operational challenge first and foremost, but it is also proving an obstacle to getting senior management buy-in. As such, some of our members report that the lack of clarity is making it hard to get businesses to engage with – and allocate budget for – the potential impact of Brexit on their firms.

Our advice is to treat Brexit as an emerging risk. As we argued in our last column, emerging risks require an entirely different approach to traditional risks. They are more nebulous: you know they are there but you can’t necessarily see the form they are taking. As such, they can’t be tackled with historical data or spreadsheets alone. Risk managers should instead focus their boards’ minds through creative discussions across business units and corporate functions, designed to tease out the potential impact of different Brexit scenarios.

Most large businesses that may be operationally impacted by a hard Brexit have already put meticulous plans in place. Our members have done all they can, whether it is through stockpiling, supply chain management or bolstering business continuity plans. On an operational level, they are ready. But how many businesses have prepared for the wider impact of Brexit? Whatever the terms of departure, Brexit has fundamentally changed the UK: the economy; the internal political landscape; its commercial relationships with the rest of the world. Few businesses will be immune to these changes and they could have a far bigger long-term impact than what happens on the day after we leave. Heat maps aren’t going to help you here; it calls for a more imaginative approach.

Any emerging risk can also be an emerging opportunity, and the same is true for Brexit – but only if we are alert to all the possibilities. This requires an open mind and the ability to step back and look at fresh ways of creating new advantages.

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