the role of treasurer
TRANSCRIPT
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Presented by C Usher 7 May 2009
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Just Imagine! We are going on a Journey
• Road Map
• Tools
• GPS
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“Treasurer”
“In their expanded roles, treasurers serve as valuable resources to their organizations providing insight from a point of view that was previously overlooked or underutilized”
Jim Kaitz, President and CEO of the Association for Financial Professionals
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The Role of Treasurer
“Treasurers serve as financial risk managers that seek to protect a company’s value from the financial risks it faces from its business activities.”
“The Challenging Role of Corporate Treasurer” by Permjit Singh
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Roles and Responsibilities
• Cash Management• Capital Markets• Risk Management• Compliance and Internal Controls• Corporate Governance • Technology
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Roles and Responsibilities
• Cash Management– Collection/ Concentration– Disbursements– Short-Term Investing– Banking Relationships– Cash Forecasting
• Quality, reliability and accuracy
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Roles and Responsibilities
• Capital Markets– Cash flow needs > one year– Financial Instruments
• Debt (Bonds/Notes) and Equity– External Financing
• Borrowing • Leasing
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Roles and Responsibilities
• Risk Management– Liquidity Risk– Credit Risk
• Lines of Credit– Currency Risk
• Transaction and Translation cost– Interest Rate Risk
• Volatility in the marketplace– Operational Risk
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Roles and Responsibilities• Compliance and Internal Controls
– Regulatory• SOX 404• Global, Country, state• FASB, NAIC, SEC, OCC
– Accounting Policies• GAAP, STAT, IFRS
– Company - Statement of Investment Policy• Liquidity Policy• OTTI Policy
– Policies and Procedures• Reviewed at least annually
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Presented by C Usher 7 May 2009
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Roles and Responsibilities
• Corporate Governance– Board of Directors
• Composition of Outside Directors & Senior Management• Audit Committee
– Senior Management• Organizational culture• Transparency/ Opaqueness
– Cultural differences• US Foreign Corrupt Practices Act (FCPA)
– Fraud and bribes
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Roles and Responsibilities
• Technology – Enterprise systems– Treasury workstations– Banking institution cash management systems– Excel spreadsheets– Security
• Restricted access• Password protected
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Three Drivers
• Globalization
• Technology
• Regulatory
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Three Drivers
• Globalization– Outsourcing– Taxation– International Coordination– Economic Growth– Systemic Failure – Access to Capital
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Three Drivers
• Technology– Decade of the 90’s– Straight flow through processing– Cell Phone
• Information– Integrity– Security
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Three Drivers
• Regulatory– 1933 – Glass Steagall Act – 1994 - FAS -115 – Mark to Market
• Established 3 investment categories– Held to Maturity– Trading– Available –for-sale
• Moved from buy and hold to active trading – 1999 – Repeal of the Glass Steagall Act
= Gramm-Leach-Bliley Act
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Three Drivers
• Regulatory
– 2002 - Sarbanes-Oxley Act– 2007 – FAS – 157 –Fair Value Measurements– 2009 – EITF – 99-20-b- OTTI
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Treasury Centralized vs Decentralized
• Economies of Scale• Technological efficiencies• Operational efficiencies • Aggregation of positions• Effective deployment of resources
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Key Processes
• Benchmarking– KPIs
• Consolidations and Eliminations– M &A– Divestitures
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Key Processes
• Implementation and Integration– Systems– Processes– Controls
• Transformation– Change agent
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Additional Tools
• Business Continuity Planning– Thorough documentation– Defined roles and responsibilities– Include revisions of processes, contact
numbers, key personnel– Mock test semi-annually – Post analysis and revisions
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Additional Tools
• Inter-Company Netting Agreements– Ensure that all company agreements conform
to specific country regulations – Consistent application of uniformity within the
contents of these agreements• Segregation of Duties• Authorization Policy• Rating Agency Relationships
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How has lenders’ quality of service changed since the crisis began?
Worse No Chg Better
Cost of borrowing 59% 36% 5%
Ability to make lending decisions & commitments
58% 41% 1%
Flexibility of Lenders 58% 39% 4%
Amt of doc req to secure funding
47% 52% 1%
Range of svcs/ products available
39% 59% 3%
Availability of suitable staff at lenders
18% 77% 4%
*Numbers add up to more than 100%Source: CFO “All Eyes on Treasury” Jan 2009
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On the Road Again
• IFRS • Taxation• Nationalization• Frauds and scams • Globalization• Economy• Technology
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The Role of Treasurer
Taking it to the “Next Level”
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Better Industry Practices
• Role of Treasurer should be integrated as a member of senior management
• Centralized Treasury• Integrated Treasury and IT systems• Compliance and strong Internal Controls• Updated written Policies and Procedures• Team effectiveness
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Presented by C Usher 7 May 2009
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The Role of Treasurer
Q & A