Half of company directors say the way they will vote in the European Union referendum will depend on what reforms the Prime Minister achieves, according to a new study.
A survey of over 1,200 members of the Institute of Directors found that two-thirds agreed that the benefits of the UK remaining a full member of the EU outweighed the negatives, but only 13% think that the EU currently has a viable socio-economic model.
Half replied that the way they will vote in the forthcoming referendum will depend on what reforms David Cameron achieves, with 40% intending to vote to remain under all circumstances, and 7% saying they will definitely vote to leave.
The IoD said businesses want Europe to focus more on securing trade deals and stay away from social and employment law, with half saying that EU interventions on these areas were "unhelpful".
Simon Walker, director general of the IoD, said: "The result of the EU referendum hangs in the balance. There is division within both major parties on the UK's future role in Europe. In this tense atmosphere, the most important question that must be considered is what effect staying, or leaving, would have on the economy.
"On balance, IoD members think the benefits of staying in the EU outweigh the negatives, but half have not yet decided how they will vote. Europe is currently struggling to deal with the many challenges it faces. The refugee crisis and the uncertainty over Greece's future may be the immediate issues dominating the discussions of EU leaders, but the underlying problem is a lack of economic competitiveness.
"It is vital that politicians here and across the continent move away from a rigid Europe which seeks to micro-manage the economies of member states.
"In particular, we are calling on the Labour party to acknowledge that maintaining the status quo is not good enough. Individual states have different economies and working practices. No matter how well-intentioned, employment regulation and business red tape imposed in a blanket fashion make it unnecessarily hard for businesses across Europe to operate."