On 23rd of June 2016, UK citizens decided the exit from EU in its own referendum. It is　undoubtedly　a historic event with extravagant impact to the whole world. As the results came out, in the morning　of 24th June, global market turned into chaos as the consensus was that UK will vote ‘remain’. Yen　strengthened above 100yen to the dollar, and Nikkei index fell 1286.33yen which was 7.92% over the　day. Companies were caught off guard while busy in AGM season.

I am honestly astounded by materialization of risk that well developed Democracy, which bases its　unspoken assumption on continued growth in population and improvement in quality of life, when　faced with slower growth, inequality in life, and aging of population, may bring an eccentric outcome.

“Remain” advocates were basing their argument on short- to mid-term impact to the economy if　leaving the EU, but “Leave” took such negatives as granted but yet argued that it is ultimately　important to bring back dignity to the country – an idealistic argument.　Human society development was enabled by a mystic balance between Democracy and Capitalism. A　balance between personal freedom, competition and safety-net in the society. However, this Brexit　incident is a strong evidence that Democracy can work as counteraction to Capitalism in a somewhat　violent manner (we know it but we never saw it materialize in such big context).

So what do companies need to do? I would like to share my very personal thoughts.　Frankly　speaking, I think it is easily imaginable that there will be some forces to slow down the speed　or mobility of people, knowledge, and goods going forward and such will have an economic impact　to businesses long term. Even the Trans-Pacific Partnership (TPP) discussion may be put on hold based　on the idea by the new presidential candidates. It is getting more apparent that the direction or the　drive that encouraged more global free-trade will likely face some obstacles which companies should　be cautious and have good contingency plan in such circumstance.

However, it is also at the same one of the very few moments to consider the M&A strategy. Global
stock market is down and companies likely face some pressure on refinancing due to some credit　contraction. It is actually a big chance for the wise companies to implement a big leap in their strategies　by non-organic growth. Many Japanese companies traditionally with huge cash piles (with　strengthening currency) is undeniably well positioned in this time of chaos.

Former FED Chairman Mr. Greenspan was on TV on Friday citing it require countries to cooperate to　control some of the growth component in the world. It is a daunting task and he himself would agree　it is not easy, as such controlled economy is something that goes against the principles of Capitalism.　However it is also very true that this incident that happened recently makes all of us feel clearly some　of the issues and potential contradiction of the growth and the competition oriented society. There is　no right answer to this problem and we need to live through this time as an individual but as a company,　under whatever circumstance, it is “good” conduct to try to focus on survival and growth of the　business as that is what keeps the world going and what seems to be the responsibilities of companies　in the society.

Considering the risks and the minimized visibility in the future of the world (thus increased risk　premiums and lower valuation of stocks), still, it is a great chance for those companies who can act on　taking calculated risks. You can also buy your own shares or increase dividends to show your　confidence and shareholders will react positively amid increased uncertainty. Confidence is contagious　and you can start from your own company which is one thing you know well.　The real chaos might still be ahead of us but it was already a good exercise to let us come back to　ourselves to realize how low the visibility of the world these days.