‘Brexit’ has made people and companies insecure and more politically aware. As a result, they need better and better advice from their corporate affairs directors. The bar is high. ‘London will lose its edge a bit and Amsterdam will really prosper.’
‘These are interesting times,’ Alex Gordon Shute says with a radiant look in her eyes. We are having lunch at the Hilton Hotel in Amsterdam, a few hours before she will make a speech at Herman Rutgers’ annual client event. The subject of the speech: the impact of ‘Brexit’ on the corporate affairs market in the UK and in Europe.
Alex Gordon Shute is founding partner of Ithaca Partners, the leading corporate affairs search firm in London. She founded Ithaca Partners in 2008, the same year in which Petra Herman and Francine Rutgers started Herman Rutgers Executive Search. The two firms work closely together as part of their international reach for clients and candidates.
Where has sentiment been since the vote?
‘The noticeable thing was the initial shock from the Brexit-vote itself. But we’ve also had a disastrous election since then. The prime minister had a very high rating in the polls and she thought she was going to win with a much bigger majority. She screwed it up so badly that she has now lost most of her majority and that is causing many political problems.’
Have companies already worked out what the new landscape is?
‘We don’t really know yet, the negotiations have only just started. Quite rightly, I think, the European Union said: “We’re negotiating your exit before we are going to negotiate anything about how we might partner with you in the future”.’
Do you think many British people agree on this with you?
‘Because political debate was so heightened around the Brexit vote, my personal view is that there was almost a more positive perspective on how much control the UK was going to have in the Brexit negotiations than is realistic. Because everybody had been talking about it for so long, they sort of fed their own egos about how much power that gave us. And the short answer is: we have very little power.
‘We have chosen to leave, the EU are going to kick us out in a pretty unceremonious way, because they don’t want a breakup of the European Union, so it’s important that we are punished a bit in how we exit. All of that is difficult but it also means we’re in a kind of phoney war until we know what the negotiations are going to produce.’
What has been the impact on the market, so far?
‘The first impact was that business did exactly what business did in the financial crisis ten years ago, which is: it stopped hiring. Companies were so shocked and so scared by the vote result, that they just froze.
‘Big businesses in the UK are very London centric. London is a very powerful city for the UK, much bigger than any of the other cities. And a bit like New York didn’t vote for Trump, London didn’t vote for Brexit. A lot of companies didn’t think that it was possible or likely that so many Brits would vote for Brexit. Most of these people didn’t know anybody that voted for Brexit. They didn’t have any friends that voted for Brexit. So it wasn’t in people’s understanding, they hadn’t thought about it.
‘So when the vote went through, it was very shocking and everybody went: “oh my god” and stopped. So the recruitment market was terrible in the second half of last year. It started to pick up again in about April, May, this year. The market is now back to being reasonably busy, which is good.’
Interesting to see that a political decision like that can still really shake the business community.
‘Yes, fascinating. The second impact was, specifically for corporate affairs: politics has become much more central to all the big corporate affairs roles now.
‘Business is now talking about politics as much more in the foreground of their decision-making, rather than in the background, because it is unpredictable and very relevant to their longer term planning and their strategy.
‘The third impact in the market is the ongoing shift – in fact I also talked about this last year when I was speaking at the Herman Rutgers party -, this relentless continuing push for higher quality people in the function.
Candidates have to be intellectually stronger, more commercial, more strategic, faster and probably also more collaborative. Because part of what’s going on is, when you have to work faster, you have to work more closely with other people, because otherwise you drop things, or if you are in silo’s, you can’t work that fast. A corporate affairs director in a global business told me recently that they worked out that it only takes twenty minutes for something bad to become a global crisis. “So,” she said, “it means, if I am in London, I cannot be awake 24/7, it means I have to have really good people in Asia and in America. We have to have a system where we are working closely together and can be always on.
Are people afraid?
‘I think people are depressed, rather than afraid. I think there is a sense that London and the UK will fall away a bit from global relevance.
I don’t think London will fall off a cliff, I don’t think it will be totally disastrous in the next three years, but I think in the next ten to twenty years, London will just lose its edge a bit. Sad. It’s also sad for those of us who live there, to feel that it is becoming a less international, less open place.’
Is there a silver lining to that cloud?
‘Haha! One of the things I am going to say at the Herman Rutgers party this evening too, is that one of the very few silver linings to that cloud, in my mind, is Amsterdam will really prosper. You guys have a fabulous city here, it’s a much nicer place to live and a much more internationally open place to live than most other places around Europe. And the level of English spoken here is so incredibly good. That’s why I think Amsterdam and Dublin will be the big winners from a UK Brexit.’