What's Neu - News from the The NeuGroup Network of Peer Groups

Blog entry
By afriberg, November 02, 2017
The European Treasury Peer Group meets in mid-November in Bratislava, Slovakia, to take on topics that range from managing risk in M&A (in a session led by sponsor Chatham Financial) to treasury transformation and cash forecasting.  
 
Here are some of the key sessions:
 
FX risk and M&A – from due diligence to integration. We’ll discuss key considerations for companies pursuing M&A involving other multinational firms, including mitigating sign-to-close risk on acquisitions or divestitures and capital structure decisions. The session will also cover how to integrate a new FX risk management program into an existing one, including the technology-related integration challenges that may ensue.
 
Pushing the boundaries to become a value-adding treasury. How, when and where can treasury push traditional boundaries and add more value across the organization? And what kind of organization does that require? What does a cutting edge, value-adding treasury department look like now and what is the end-state vision for treasury transformation?
 
Upping the ante on cash forecasting. A member will update the group on ongoing efforts to improve forecasting, including merger-related financing and the imperative to reduce debt through company-wide cash-mobilization efforts, and next-level analysis of cash management activity ownership and execution between treasury, FP&A, SSCs, RTCs and local finance.
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By thoward, October 31, 2017
In the November issue of iTreasurer, we discuss a couple of kinds of threats: activist and cyber. While the former are perhaps less odious than the latter, they’re still a concern and need to be dealt with effectively. This month iTreasurer also touches on new projects FASB is working on, as well as a new exchange for distributed-ledger transactions.
 
On page 1, in “Activism Is Up, Are You Ready?” we discuss what some companies are doing to prep for what’s becoming an inevitable occurrence: an activist investor looking to stir things up. As mentioned, that’s becoming uncomfortably close to a “not if, but when” scenario. “There’s no corporate structure these days that is perfectly immune to activism,” says Lawrence Elbaum, Counsel, Commercial and Business Litigation at the law firm Vinson & Elkins. “If an activist finds a thesis, they’re going to find a way to champion that thesis by leveraging the company’s shareholder base and defensive structure. They’ll find a way to make noise.”
 
On page 6, we explore the coming disruption in the global trade finance market that’s forecast in a report from Greenwich Associates. That reflects a number of crosscurrents in the sector, including a new strategy among big banks of leaving the door open for smaller players—both bank and non-bank—as well as technological change. All of which means there could be a lot of turnover in the sector. Greenwich “projects that among large companies using trade finance, approximately 45% of companies in the US, about half of European companies and approximately 80% of Asian companies will shift business among trade finance providers in 2018.”
 
This month’s peer group summary is of the NeuGroup’s Corporate ERM Group. At the group’s last meeting, members exchanged views on cybersecurity and data privacy regulations, and how the biggest cyber risk threats are not external forces but the internal forces in a company. They also talked about ERM reporting and moving beyond heatmaps, and looked at new ways to illustrate risk to stakeholders.
 
In October, an intrepid Anne Friberg traveled to Barcelona to lead a panel discussion at EuroFinance’s 26th annual conference, which she details on page 11. What we learned: It’s an issuer’s market for investment-grade corporate bonds, agency ratings are useful for many things, working capital is strategic, and European money market reforms are here.
 
And on pages 12-13, a story on how there is some good news for cyber insurance shoppers. Despite the continuing steady flow of bad news about major companies getting hacked, cyber policy premiums have continued to fall and their coverage has increased. That’s because with increased competition rates are coming down. So if you’re in the market for cyber insurance, now is the time to buy.
 
On page 14, companies that have agreed to accept digital currencies like Bitcoin and Ethereum have faced the same hurdles other new pay schemes have faced. But a recently approved derivative exchange and clearinghouse may prove to be the facilitator the sector has been waiting for.
 
Finally, on page 15, iTreasurer delves into a recently published a white paper from the International Swaps and Derivatives Association that seeks to bolster efforts to harmonize regulatory regimes worldwide and ultimately ease the regulatory burden on swap market participants.
 
Enjoy. 
 
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.
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Blog entry
By afriberg, October 26, 2017
The Treasurers’ Group of Thirty (T30) will meet in Toronto, Canada, in late November with an agenda focused on transforming treasury to meet business needs, optimizing TMS while remaining cyber-secure, the challenges of improving working capital metrics and more. The event will be sponsored by Kyriba. 
 
Here are some of the key sessions:
 
Treasury Transformation – The Journey So Far at Our Host Company: What does a cutting-edge, value-adding treasury department look like now? At what point do you decide that the treasury organization is no longer fit for the future growth and development of the company? And how do you go about transforming treasury to align its mission and service delivery with the company’s growth strategy and business model? Our meeting hosts will share what their company has done so far to transform treasury to meet current and future needs and challenges.
 
Cyber Security and Leveraging Technology to Prevent Fraud: What cyber security initiatives have members undertaken and how is awareness of cyber threats – rising in number and sophistication – communicated internally? Kyriba will address how you can leverage technology and configure your TMS to detect and prevent fraud and cyber crime.
 
Working Capital Change Management: “When the CEO notices working capital, it’s strategic,” they say. But that doesn’t mean that changing the company’s approach to working capital management or treasury’s involvement to drive that change is welcome in all quarters. How can treasury strike a delicate balance? Real-life examples of the positive impact treasury can have on working capital and cross-departmental collaboration.
 
Other sessions will tackle capital allocation and the best ways to communicate treasury’s performance to the board of directors. In addition, there will be lunch-table discussions on pensions, interest rate risk management and FX hedging. 
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By jneu, October 25, 2017

For MNC CFOs in China, SSCs are key to finance-business cooperation supporting growth.

NeuGroup’s Asia CFO group met October 19 in Shanghai and discussions about finance and business team cooperation dominated. Close finance-business partnerships are needed to meet the challenges in China of rapid economic growth, market and regulatory change, which require fast-paced business transformation. And to support close finance-business partnerships, MNCs need a new kind of Shared Services Center (SSC).

The SSC-Business partnership

One of the key lessons for business-finance team partnerships is the need for a strong SSC. This was underscored by two presentations over the course of the meeting. The first by a CFO and his shared services center head detailed a project to insource its SSC activities, including the business process outsourcing (BPO) of a recent acquisition. What they found was that bringing SSC activities in-house facilitates better end-to-end coordination of processes from the business end as well as finance. It also brings “sunshine” to several shadow costs that often remain hidden in BPO arrangements and creates opportunities to “harvest” value-added activities.

One example shared was allowing the SSC to take the lead on collections, which had been traditionally left to sales. Sales managers are often more inclined to close the next contract and do not want a collection conversation to get in the way of that. The shared services team is also going to be more conversant and receptive to training to make them more knowledgeable about procedures on all forms of payment collection, such as those involving bank acceptance notes and discounting, which is a common form of payment in China. The payments team in the SSC can also share knowledge on this form of payment creating a center of excellence. According to the CFO of the company presenting, the decision to shift collections to the SSC has already improved cash flow and DSO significantly. Banks and other providers offering solutions to improve the situation further, moreover, now have a central point of contact to make this happen.

In another example of how Shared Services Centers are evolving into new centers of excellence, Deutsche Bank highlighted its recently-created regional Cyber Incident and Response Centers. Their Asia Pacific center head described the work these centers do to protect the business and clients from cyber attacks. The aim is to improve the bank’s ability to detect threats and provide a robust response to incidents around the globe and around the clock.

Other examples shared involving SSCs and finance-business cooperation include the use of Robotic Automated Processes to retrieve point-of-sale data and relieve finance teams of confirmation calls and store managers from having to stop caring for customers to field their calls. Some companies are also distributing dashboards and other data visualization-intensive reports to line managers via WeChat, so they can receive and process important data from their smartphones without retreating to their office desks.

A well-functioning SSC is so important that many members noted initiatives to create a global SSC Head to boost efficiency and spread business value enhancing best practices across centers globally. The talent level and experience required to scale finance support to fast-growing, transformational businesses in a highly-regulated market like China means that SSCs based there often set the global standard. And thus, the heads of China-based SSCs serve a very important role even if they are not the global head. “My SSC head is who really helps me sleep at night,” as one CFO noted.

Outlook

Building on meeting presentations showing the growing importance of SSCs, and the introduction of robotic process automation introduced at the prior meeting, NeuGroup will work with members and their SSC heads— both in the region, and those coordinating standards and best practices globally—to continue exchanging knowledge and insight on their use cases and evolution. Since they are so critical to finance and business partnerships, and SSCs in China appear to be at the forefront on global trends, we encourage all our stakeholders to pay attention to what is going on here, within their organizations, those of their peers and those of their banks and other suppliers. It’s a space worth watching.

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Blog entry
By bshegog, October 19, 2017
NeuGroup’s Treasury Investment Managers’ Peer Group and Treasury Investment Managers’ Peer Group 2 will gather together at the offices of sponsor J.P. Morgan Asset Management in New York City on November 15-16 to discuss a variety of global market and economic issues affecting the decision making of finance professionals responsible for investing excess cash. 
 
Aside from the opportunity to network and share best practices with dozens of counterparts at cash-rich corporations, here’s some of what’s on tap:
 
What’s Ahead for Global Markets: Chief Global Strategist and Head of the Global Market Insights Strategy Team for J.P. Morgan Asset Management, David Kelly will provide timely insights and analysis for investment managers trying to get a handle on how tightening monetary policy, dysfunction in Washington and global political turmoil are shaping the outlook for debt and equity markets and the global economy as 2017 winds down. How are you positioning the investment portfolios as rates look poised to rise in 2018 after the US economic expansion and the bull market in stocks enter their ninth years? 
 
Deep Dive on Credit: Debt instruments and credit play an outsized role in portfolios managed by members of these groups, and this session will feature an expert panel from J.P. Morgan Asset Management answering questions and offering analysis on everything from global fixed income opportunities to measuring counterparty credit risk to alternatives to money market funds. 
 
European Money Market Reform: Memories of US money market reform are still fresh in the minds of members now contemplating the implications for cash balances of similar changes coming in Europe. Like the US, there will now be variable net asset value (VNAV) funds in addition to the constant NAV public debt funds (government funds). Unlike the US, there will also be a “low volatility” NAV (LVNAV) option that will be allowed to be CNAV-priced. Members will discuss the details with J.P. Morgan Asset Management experts and get an update on political and regulatory reforms as well. 
 
Odds and Ends: Members will share what dashboards they use to report to senior management and what systems they use to prepare the reports. They’ll also talk asset allocation and efficient frontier analysis with specialists from J.P. Morgan Asset Management. We’ll have a session on the political landscape hosted by Axios, the new media company. And, yes, we’ll delve into some tax talk as members consider what they may do with repatriated cash. 
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By afriberg, October 17, 2017
NeuGroup thanks all the attendees of the T30 LC 2017 H2 Meeting in New York and the team from Société Générale for hosting and sponsoring. 
 
Here are some highlights from the event, held September 27-28:
 
Cyber Insurance, Anyone? Everyone?
Attendees had a lively discussion about buying insurance to cover losses from cyber attacks like the one that slashed hundreds of millions of dollars from quarterly profit at one member company. Exploring the cyber insurance market is one of this business’s top priorities, and several members favor making this an agenda item at the next meeting. Part of that session may include bringing in someone from Marsh & McLennan, which provides cyber security insurance to several members. One participant discussed the resistance of his IT department to providing information to a potential carrier. Another said the initial application for cyber coverage was easy but that in the second year the insurer asked a lot of specific questions.
 
Inside a Treasury Makeover.
One member at a beauty products company tackled the topic of treasury transformation by describing how his company addressed a fragmented and outdated treasury system infrastructure. Goals included increasing the reliability and accuracy of cashflow forecasting, boosting the percentage of cash under control and achieving further optimization of working capital. Notably, treasury chose to use third parties to oversee the transformation and help navigate the vendors and do an RFP, starting with Hanse Orga and then moving to e5 when the IT department wanted a say in the SaaS system. 
 
The biggest challenge involved resistance put up by business units to the changes treasury wanted to implement. Treasury ended up having to use “force” by establishing metrics to get affiliates on board. Another pain point involved finding that SAP is more fragile than treasury thought, leading to the conclusion the company should have done more testing before it went live with the new system.
 
Supply Chain Financing: Bank or Bank Agnostic?
The projects and priorities of one packaged foods company include rolling out supply chain management across markets. That sparked an interesting discussion about the pros and cons of using banks versus bank-agnostic providers when companies want to extend the terms of their accounts payable. While this department only uses bank-agnostic vendors, another member uses a bank for the service because it offers the best pricing and outreach for the company; the bank in question has particularly good reach with most if not all of the company’s suppliers. Another member said, “making the bank work for us” is another incentive. Members also discussed whether making financing for vendors mandatory is worth the cost in ill will. “Your suppliers will hate you,” one said.  
 
Tax Reform: The ‘Unified Framework.’
Société Générale updated the group on the “Unified Framework” for tax reform unveiled the day before by the Trump administration and key congressional committees. Highlights include a reduction in the corporate rate to 20%, a one-time repatriation of foreign profits held offshore at rates that were not specified and limitations on net interest expense deductions (again, no details). Asked about the potential use of repatriated cash, one member said it all depends on the interest expense deductibility dilemma. Many obstacles stand in the way of passage of a bill, including how tax cuts will be funded given limitations on deficit growth as Republicans seek reform under a budget process called reconciliation that requires deficit neutrality outside of a 10-year window. As one member observed, “There’s a lot of event risk; it’s going to be a little scary to watch.” That’s especially true for companies who will face pressure over the use of excess cash from activist investors. One member said, “We will have a tough time justifying not giving shareholders money because we are paying down debt.”
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By bshegog, October 13, 2017
The Corporate ERM Group meeting hosted by Parker Hannifin on November 9-10 in Cleveland will feature timely insights from corporate professionals, academics and other experts on critical risk topics, and will offer NeuGroup members the chance to discuss challenges and opportunities they face in this increasingly complex field. 
 
Check out these highlights from the agenda:
 
Regulation and Risk - The Banks’ View: KeyBank’s chief risk officer will share details and perspective on how his bank and the financial industry have navigated the changed, tightened regulatory environment in the wake of the financial crisis. What lessons does the experience hold for non-banks on how risk groups can better position organizations strategically amid an uncertain regulatory backdrop? 
 
Understanding Blockchain’s Risk Profile: Proponents of blockchain technology tout its security benefits, but some financial and risk professionals are wary of being too ahead of the curve. What’s the risk-reward offered by blockchain? We’ll get the views of Symbiont president Caitlin Long about the selling points of blockchain and her company’s technology, which promises to reduce risk and eliminate tampering in financial transactions and save money and time. Long, who worked at Morgan Stanley, also shared in a patent for terminating pension plans through mutual annuitization. 
 
Natural Disaster Risk - Harvey, Maria and Beyond: This season’s rash of hurricanes makes clear both the suffering and devastation brought by natural disasters as well as the difficulty of effective risk planning. Climate change and other factors are taking a toll on communities, governments and corporations tasked with anticipating unpredictable risks and dealing with the aftermath of calamities. Members will share their thoughts and strategies on managing financial risks that seem likely to grow in the years ahead. 
 
Odds and Ends: Members will discuss the growing link between risk and strategy and the challenges facing risk professionals fighting to play a greater role in a company’s strategic mission with one of the leading academic researchers on the topic. And we’ll discuss the just-released COSO framework on ERM with one of the project’s key advisors. What does this new framework mean, and why does it matter? 
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By afriberg, October 12, 2017
The Assistant Treasurers’ Leadership Group will meet in San Jose, California, in November to take on topics that concentrate on the treasury organization, maximizing the usefulness of existing systems and timely reviews of FX hedging programs. 
 
Here are some other key sessions:
 
Future Treasury Organization and Talent: What does a cutting edge, value-adding treasury department look like now? What is the end state vision for treasury transformation? This session will include: current thinking on treasury in key global regions; redrawing the line between treasury and shared services; headcount adjustments due to automation and digitalization; and key talent and skills needed when treasury goes digital. 
 
Freeing Trapped Data – Cash Flow and Exposure Forecasting Using Enterprise Systems Data: One of the biggest treasury frustrations is the inability to get the right data out of enterprise and bank systems in a timely fashion to inform forecasting and support better decisions on cash and exposure management. How do we free trapped data?
 
Changes to FX Hedging Practices: Structural USD strength and reversal, global rate inflection points, updates to hedge accounting and geopolitical concerns have many MNCs reviewing FX hedging practices.
 
We’ll also tackle capital structure and planning for US tax reform and offer up a treasury excellence and innovation showcase.
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By afriberg, October 11, 2017
 
The Tech20 Treasurers’ Peer Group will meet in Sausalito, California, in early November to tackle a full agenda that includes a panel on acquisition and spin-off financing with members and bankers from BNP Paribas. 
 
Here are some other key sessions:
 
Risk Management – FX Hedging and Industry Standard Risk Management Policy: The session will kick off with a member seeking input on what constitutes an industry standard risk management policy and how he can bring his program up to date. FX programs are challenged with new (but most say better) rules for hedge accounting, and trends in cost cutting, digitalization and the USD cycle. 
 
Capital Allocation – A Continuing Conundrum: In the 2017 tax and political environment, how do members stand on the capital allocation conundrum? How much should go to buybacks, dividends, M&A, etc.? How do you decide? And who influences the decision? A member will discuss the capital allocation issue while another will address the calculation of the company hurdle rate and the factors influencing it.
 
Growing Up and Transforming Treasury – Member Case: We’ll hear how one of the tech members describes the journey so far to scale treasury and align its mission and service delivery with the company’s evolving growth strategy and business model. What can this member’s experience teach other companies to do and to avoid?
 
Another session will tackle tax and treasury synergies and collaboration, and an external speaker will present a blockchain use case.
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By thoward, October 05, 2017
 
Members of NeuGroup’s Internal Auditors’ Peer Group will get together in early November to exchange views on a wide range of topics, including cyber risks to the cloud and data as well as systems implementation audits.
 
Other topics will include:
 
Risk assessments. Who does an annual risk assessment and who does a quarterly one? Members will compare and contrast strategies and processes and discuss how each company arrives at the top risks. What are members using to glean this info? An online survey? Interviews? What questions do they ask?
 
RPA audits. Artificial intelligence continues to advance and provide new and innovative applications for corporate treasury that holds the promise of reducing human error and costs. With that in mind, many companies are thinking about robots for tasks that don’t need a lot of brain power.
 
Post-acquisition audits. Acquisitions are always exciting times for companies. But a sober review of what happened and what happens next is always important. This can inform management (for the next acquisition) how events, decisions, communications and actions surrounding the merger were handled. What could have been done differently to make the integration easier and what additional actions remain unfinished?
 
For more than two decades, NeuGroup has led the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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