The boards of the FTSE 350 companies are more concerned about lagging growth in the UK economy and legislation and regulation than the prospect of a Brexit.
The bi-annual survey, conducted by the Financial Times and ICSA: The Governance Institute, found that confidence in the UK economy is at its lowest point since the survey began in 2012, with jut 13% of FTSE 350 boards expecting an improvement in the next 12 months.
That figure is down considerably for 40% in December 2015 and a whopping 74% in July last year. Those expecting a further decline in growth more than doubled from 11% to 24%, while 24% believe it will depend on the outcome of the EU referendum.
Peter Swabey, policy and research director at ICSA: The Governance Institute, said: "Declining business confidence linked to slowing economic growth is reflected in the 45% of respondents declaring no change in plans for capital expenditure in the next twelve months.
"It will be interesting to see whether this situation changes once uncertainty about Brexit has been removed."
Confidence is also very low in the global economy with just 16% anticipating stronger growth over the next year.
More than four in 10 respondents described the possibility of a Brexit as potentially damaging the UK economy, however, perhaps worryingly, half (49%) said they had not assessed the implications leaving the EU might have on the UK and their businesses.
The study also found that there is a perception that the continuing pressure on boards to focus on risk management is prioritising process over performance and strategy, and there is considerable frustration arising from the tide of new regulation and legislation.
Over-regulation and compliance for compliance’s sake have been identified as the greatest corporate governance issues. In particular, achieving effective risk management without stifling growth is a major challenge.
