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

Blog entry
By bshegog, September 13, 2017
NeuGroup’s Global Cash and Banking Group looks at how technology is transforming treasury. 
 
Members of the GCBG will meet September 27-28 at Microsoft in Redmond, Washington, to discuss a range of issues, including cybersecurity and treasury transformation.  
 
Sponsored by Bank of America Merrill Lynch, the meeting kicks off with a panel discussion on how members across a variety of sectors are preparing for the future of treasury. How is technology playing a role, and what tools are viewed as critical? One member will showcase how his company has automated its intercompany settlements process, significantly improving the application and settlement of intercompany transactions. 
 
Later, members will turn their attention to best practices in cash flow forecasting. Managing cash is a primary function for treasury, yet many members suffer from the same challenges. How much cash do they have, where does it reside, and how quickly can it be accessed? In this session, the group will share ideas for enhanced cash flow forecasting using enterprise system data, TMS and bank data. 
 
To wrap up the meeting, members will consider the new cyber threats facing treasury. Today, it’s important for business units to understand that cyber threats are not just an IT issue but also a business issue. What resources and tools are being used to mitigate these risks?
 
In addition to these sessions, the meeting will feature an open forum and time to discuss members’ top projects and priorities.
 
For more than two decades, NeuGroup has lead 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 aorwick, September 07, 2017
NeuGroup is pleased to announce that Craig Martin has joined us as Senior Executive Advisor for Network Development and Knowledge Exchange. In this role, he will work with all NeuGroup stakeholders to connect leaders in treasury and finance to share knowledge and experience to better their companies and careers. He will also assist with content development and partner relationships and join our team of facilitators to lead peer group sessions and other forums. 
 
Craig comes to NeuGroup after 12 years with the Association for Financial Professionals as Executive Director of the Corporate Treasurers Council and treasury practice lead. He brings to NeuGroup 40 years of experience in the financial markets, including as a practitioner in corporate treasury and finance. Craig shares our passion for building forums and relationships that encourage value creation with knowledge exchange.
 
“Craig’s enthusiasm for engaging with treasury and finance professionals was clear from the moment we started discussing potential collaboration,” notes NeuGroup Founder and CEO Joseph Neu. “He loves this as much as we do, and we are glad to give him the opportunity to continue doing what he is most passionate about.” 
 
We look forward to collaborating with Craig and seeing him share his knowledge and experience with all the leading treasury and finance professionals of the NeuGroup Network. 
 
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Blog entry
By aorwick, September 07, 2017
NeuGroup is pleased to announce that Antony Michels has recently joined us as Director of Knowledge Exchange Content. In this role, he will lead our efforts to develop content from the knowledge exchanged in our peer groups — also known as NeuGroup Knowledge. 
 
Antony is an Emmy Award-winning journalist with extensive experience in print, digital and video media. He comes to us from Yahoo! Finance and worked prior to that for Bloomberg Television, CNN and Fortune Magazine. 
 
“I believe that there is tremendous value we can create for all our stakeholders by distilling shared knowledge to make treasury and finance leaders better at what they do—and Antony will help us to do more of this,” says NeuGroup Founder and CEO Joseph Neu. “His efforts come with my promise that we will distill and distribute this knowledge without breaking the trust you have in us to share openly in NeuGroup forums.” 
 
Antony will work closely with our peer group leaders and Julie Zawacki-Lucci, who heads NeuGroup Peer Research, to ensure that NeuGroup Knowledge content has the validation of the leading professionals of the NeuGroup Network. He will also be reaching out to customers directly to better understand how NeuGroup Knowledge content can serve them best.
 
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Blog entry
By thoward, September 05, 2017
In this month’s iTreasurer, we continue a discussion of taxes, this time focusing on strategy and the need to keep in mind the global attitudes on taxes when writing that strategy. Also in this issue: Corporate cash piles continue to grow, bots for treasury and a little blockchain, too.
 
Global attitudes on how corporations pay their taxes have been developing an edge over the past several years. Take the OECD’s BEPS, or Base Erosion and Profit Shifting initiative: The name itself implies tax dollars absconding to some low-tax haven, thereby eating away at the tax revenue. The UK has initiated a new requirement that British companies of a certain size must publish their tax strategy online.
 
And the UN, as part of its environmental program, has included a list of guidelines companies should take into consideration when creating the plan. The basic premise is: be nice, pay your taxes. “I think if they are not aware of this trend yet, they’re going to be aware of it very soon,” Barbara de Marigny, a partner at the law firm Orrick, says in “Striking a Balance with the Tax Plan” on page 1.
 
In our “Anticipated Exposures” section on pages 4-5, we discuss how institutional prime funds are still finding a place in the hearts and portfolios of MNCs; using performance scorecards to measure treasurers; and how onshoring—i.e., companies moving operations back to the US—is growing.
 
On page 6 is a discussion of how corporate cash continues to expand. But there’s another related growth that’s somewhat worrying to raters: “adjusted leverage for both investment-grade and speculative-grade issuers is near decade highs and, conversely, the cash-to-debt ratio is near decade lows.”
 
This month’s peer group summary is from NeuGroup’s Global Cash and Banking Group meeting. For members of this group, tech is top of mind. A high percentage of members currently are “implementing specific solutions to improve new or existing processes, with ERP upgrades, SWIFT implementations, TMS rollouts, and blockchain among the top projects.”
 
On page 11, we look at how robots could begin taking over the back office. That’s because the back-office workload is fairly repetitive, routine and perhaps above all, dreary and uninteresting. And while artificial intelligence for now may be “pie in the sky” when it comes to corporate use, robotics or more specifically, robotic process automation, “is more readily available, effective, and affordable than people realize. And equally important, it is relatively simple to deploy.”
 
On pages 12-13, we discuss the results of cross-peer group analysis on taxes and tax prep. The upshot, writes contributor Julie Zawacki-Lucci, is that “planning and modeling for the prospect of tax reform and its impact on capital structure, capital and cash forecasting are consuming large chunks of time for many NeuGroup peer group members lately.” But treasurers and corporations want to be prepared; thus they are developing scenarios and proposing actions for various outcomes.
 
Blockchain for treasury is the focus of the story on pages 14-15. There’s been a lot of talk about the transformative power of blockchain or distributed ledger for companies. “But so far,” writes contributor John Hintze, “few practical applications for corporate treasury have emerged. But that’s now changed.”
 
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 jneu, August 31, 2017
The new Apple Park headquarters may steal the show, but there’s plenty to discuss.
 
When the Treasurers’ Group of Mega-Caps meets on September 27 at Apple Park – the company’s iconic new headquarters – it is likely that the host facility will steal the show. However, there’s much more on members’ minds than stylish new digs, as we plan on discussing projects ranging from cyber-event recovery strategies to WACC/hurdle-rate calculations and payment fraud controls to preparations for the end of LIBOR. 
 
Updating the group on US tax reform and preparations for its various contingencies remains an agenda item, but progress in Washington is still signaling that more time is needed for the necessary details to emerge to form a real planning picture. The consensus at the last meeting of a messy outcome, if, indeed, there even is one, appears correct.
 
Interest rate risk management, including hedging and rethinking the fixed/floating mix of the debt portfolio (and the rest of corporate capital structure) is also top of mind. We are in an unusual rate cycle, and the normal rule books may not apply. Plus, multinationals have diversified their debt mix to a much larger degree, so swap books (both interest and currency) have ballooned. Managing derivatives as new market regulations bite, with treasurers contemplating much larger exposures to counterparties, give added cause for review. These and other issues put a focus on what treasury should do as corporate objectives concerning interest rate risk management are redefined by the uncharted nature of today’s global rate environment.  
 
Finally, following last meeting’s discussion of greater use of data and data analysis, empowered by ongoing digitalization of treasury and the people and technology supporting digital transformation, we will look at how treasury and the FP&A function are interacting and opportunities to work together proactively to harness change to benefit risk management, planning and forecasting. 
 
For more than two decades, NeuGroup has lead 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, August 16, 2017
The two NeuGroups for FX risk managers, FXMPG and FXMPG2, share several key items on the agenda for their respective meetings in Chicago, Illinois, and Palo Alto, CA. 
 
Following a review of member projects and priorities, both groups will launch into discussion on risk management, performance tracking, and trading and execution, among other current trends and challenges.
 
Risk management strategy deep dive. In a session designed to compare and contrast how risk management objectives and hedge strategies link up, a few members in each group will open their strategies and objectives up to scrutiny and benchmarking with their peers. A goal of the session is to examine different hedge targets, approaches, instrument choices and hedge tenors.
 
Dashboards for the FX function. What dashboards are members using or trying to develop to adequately track the performance and results of the FX function’s activities, and how do they differ by specific job function and/or who the audience is? Members must consider the key components of the job that needs to be measured and how to track and present them in a meaningful way.
 
Workflow in FX; best practices in FX trading and execution. How should the FX workflow be designed for smooth operations and integration with other necessary technology in treasury? Higher volatility puts trading and execution practices – and their associated costs or savings – front and center. The respective meeting sponsors will weigh in on this topic, and members will share how they have designed their workflows in the context of their technology infrastructure.
 
Thomson Reuters will sponsor FXMPG, and 360T will sponsor FXMPG2. 
 
For more than two decades, NeuGroup has lead 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, August 10, 2017
This month’s issue of iTreasurer has a tax and regulatory theme, starting out with some of the downsides of one possible outcome of tax reform and ending with a story on new aspects to hedge accounting rules. In between we discuss coming money market reform in Europe, the benefits of FX algos and much more.
 
With the failure to repeal Obamacare a fractious Republican party is looking to come up with a viable tax reform package. One feature of reform long sought after—and sometimes considered a kind of tax reform appetizer—is a repatriation holiday, and on page 1 in “Cash Repatriation Has Downside Potential” we discuss some issues if it comes to pass. Currently US corporations hold approximately $2.6 trillion in cash overseas, but as that cash has accumulated, so has its importance in ratings for MNCs. One aspect of this is “net debt,” which agencies have factored into their ratings; the assumption being that cash held overseas can be used if necessary to service debt.
 
However, looming tax reform has prompted concerns about the validity of that theory and could result in ratings downgrades. That’s because MNCs have borrowed aplenty in the current low-interest rate environment. S&P surmises that repatriated cash would be distributed to shareholders through dividends or share repurchases and not to pay down debt.
 
On pages 4 and 5, iTreasurer takes a quick look at managing counterparty risk and how it’s easier articulated than executed. Also finding the right treasury structure and exploring different methods for cash forecasting.
 
In “MMF Regulation 2.0 About to Hit” on page 6, contributor Barb Shegog explains how money market fund regulation, similar to that imposed in the US, is about to descend on European MMFs. “Although both the US and European markets will experience similar regulation changes, the Euro market dislocation should have less of a market impact than the SEC regulation changes to the US market,” writes Ms. Shegog. That’s because the European regulation changes are not as extreme and European investors are more familiar with the regs.
 
This month’s peer group meeting summary is from the NeuGroup’s Assistant Treasurers’ Group of Thirty. Members of the group in that meeting discussed a wide range of topics, including planning for tax reform, a shift in risk attitudes (toward derisking) as well as predictions for slower growth globally.
 
On page 11, contributor Anne Friberg discusses how FX algorithms can save transaction costs and improve efficiency. “FX managers are discovering the benefits of algo trading, particularly the ones that improve execution performance and save on trading costs,” writes Ms. Friberg.
 
In “Is Your Treasury Team Prepared for the Digital Future?” contributor Julie Zawacki-Lucci suggests that “bolder transformational thinking about treasury organization and talent management [will be] needed to ride the digitalization wave and prevent what one NeuGroup peer group member labeled the ‘tsunami effect’.”
 
Finally on page 14 contributor John Hintze, with help from Chatham Financial, fleshes out FASB’s amended hedge accounting standards and what it means for companies that adopt the standards early.
 
Enjoy the issue.
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Blog entry
By bshegog, August 09, 2017
The Assistant Treasurers’ Group of Thirty meets the FX Managers’ Peer Group 2 this September in a special joint meeting at HP Inc. 
 
Together, two of NeuGroup’s long-standing peer groups will discuss global financial markets, as well as the new FX ecosystem. 
 
To kick off the meeting, AT30 sponsor HSBC will touch on the implications of tax and regulatory changes in the US. Updates to the tax code have the potential to impact business operations and liquidity planning. How are both groups preparing in the interim? And later, FXMPG2 sponsor 360T will update members on new corporate FX practices. Regulations like Dodd-Frank, EMIR and MiFID II have driven changes aimed at promoting transparency and reducing systemic risk in financial markets. Coupled with larger trends, including that toward platform trading, the operating environment for that actors in the FX markets has changed. Now, what do corporate treasury practitioners need to know to benefit?
 
On Day 2, an AT30 member will walk through his company’s system integration project, for which his team received a highly commendable Adam Smith Award. How was the company able to adjust its US-based system to communicate globally? And how can other companies use modern technology to standardize operations?
 
Members can also look forward to a session on cybersecurity, led by an AT30 member in the healthcare industry whose company practices extreme cyber-risk management. Today, cybersecurity is largely seen as a corporate-wide issue, calling for employee training and awareness. To close, the group will review processes that can be implemented to prevent important data from getting into the wrong hands. 
 
For more than two decades, NeuGroup has lead 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, July 11, 2017
This month’s issue of iTreasurer begins with the mundane but important function of custody banks and ends with a look at the effective cybersecurity structures some companies in the NeuGroup universe are using. In between a summary of the NeuGroup’s Treasurers’ Group of Thirty Large-Cap Edition meeting as well as a best practices story on payment cards.
 
On page 1 of the issue contributing editor Barb Shegog discusses custody banks and how they don’t get a lot of love from treasurers. And yet they provide “significant support services to the investment program.” But most investment managers and many in NeuGroup peer groups “only rate their custodian as average.” The problem is that switching to something better is a dreaded exercise. “Many members dread a switch so much they stick with the status quo even if it isn’t really working. Have investors given up on excellence?” wonders Ms. Shegog.
 
In “Anticipated Exposures” on pages 4-5 we take a look at how the treasurers’ role is continuing to change and that their status as the go-to strategic person in the company is a trend that is stronger than ever. We also examine how companies should evaluate operating in high-risk countries—either political, social, financial, economic or environmental. How do companies make investment decisions in such high-risk countries and evaluate risk vs. return parameters on short-term as well as long-term investments? Also a look at how companies should “take stock of recently amended record-keeping requirements, which should be easier to comply with and provide an opportunity for treasury to ensure its systems are capturing and retaining the information correctly.”
 
The T30LC peer group summary reveals that tax reform remains a top concern for treasurers of the some of the world’s largest companies, although they have plenty of other issues to consider. One is their banks’ share of wallet and how much business one has to support the credit group—and how to right-size it. Also, members were made aware that getting what they wished for on, say, a cash repatriation tax break does have perils; that is, activist investors will look to grab any cash distributed to shareholders, which could have an impact on corporate capital structure and ratings. Also discussed were best practices for frequent bond issuers. 
 
In “How to Create a Best-in-Class Commercial Card Program—the (Not So) New Payment Channel,” contributor Geri Westphal sits down with experts from HSBC to discuss commercial card programs. These programs have been around for years, and in most cases they included T&E expenses and a select number of procurement transactions. “Now, as key stakeholders across the buyer’s organization realize the benefits associated with commercial cards and with the increase in fintech innovation, commercial card programs are being structured to capture more, if not all, payment transactions across the entire organization.”
 
Finally, in “The (Inadvertent) Enemies Within” on page 15, we discuss the growing practice of hackers gaining entry to the company’s treasure—be it data, cash, or just systems in general—using naive employees. The answer to keeping hackers in check is an active response team.
 
Enjoy the issue.
 
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 aorwick, June 19, 2017
The Treasurers’ Group of Thirty (T30) anxiously awaits tax reform and other potential economic boosters.  
 
Here is a summary of key takeaways from the group’s recent meeting at Nasdaq:
 
Will tax reform ever arrive? Some kind of tax legislation is likely to become law this year. However, it probably won’t be the radical reform favored by House Speaker Paul Ryan and many Republicans in Congress. That is unless a bill is introduced by the start of August, given procedural hurdles and other challenges, including the 2018 budget and raising the debt ceiling. The radical tax reform would up end the current corporate and individual tax systems, eliminating the corporate income tax completely and instituting a consumption-like border adjustment tax (BAT). Lesser reform could lower the corporate rate, require repatriation of corporates’ trapped cash and introduce a territorial tax system, according to KPMG’s Kathleen Dale, principal, international tax accounting. The tax legislation must be revenue neutral to skirt an almost certain Democratic filibuster and avoid expiring in 10 years, and to do so, BAT will be necessary to generate tax revenue, although it faces stiff opposition from US importers.  Another controversial component of the “House Blueprint” is the elimination of interest expense, given the impact it would have on corporate funding sources. 
 
Repatriation: Bet on it. Companies are chomping at the bit to repatriate stranded cash, Ms. Dale said, and moving to a territorial system to tax overseas earnings is a necessity or companies will continue to hold cash overseas. The Republicans need some sort of tax win, should more radical reform prove elusive, and a territorial tax system fits at least part of the bill. “I think it’s very likely we’ll get mandatory repatriation before the 2018 midterm elections,” she said. That was a key takeaway for one member, who said his treasury would have to rethink how it wants to position itself.
 
Forget about the 10-year rising. Esteban Burbano, portfolio strategist at PIMCO, said the bond giant sees the today’s low rate environment continuing indefinitely, even if Republicans achieve tax reform or other potential economic boosters. Aging populations, weak productivity growth and loads of debt will result in a world of muted inflation and growth around 2%. In the immediate wake of President Trump’s election, PIMCO’s fixed-income savants wondered whether the trajectory might improve somewhat, and indeed equity markets rose dramatically, apparently pricing in those hopes. But since then, the difficulty of implementing a pro-growth agenda has sunk in, creating a challenging current market. Despite inflation falling in recent months, PIMCO still sees the Fed raising short-term rates twice more this year, if only to build monetary firepower to counter the next economic downturn. 
 
Uncertainties prompt PIMCO to tighten belt. PIMCO’s debt portfolio has leaned more conservative, not because the money manager has a pessimistic economic outlook, but because uncertainties abound: the rise of populism around the world, China’s National Congress meeting later this year and its subsequent leadership changes, possible missteps by the Trump Administration and the list goes on. PIMCO forecasts 2.25% global growth for 2017 compared to 2% last year, “but we’re worried about the tails,” Mr. Burbano said. Consequently, the money manager has lowered its overall investment duration to between five and seven years, while hedging at the front and long ends of the portfolio.
 
Cyber insurance ubiquity. One member asked how many attending companies had cyber insurance, and most responded affirmatively. Members discussed property and errors and omissions (E&O) policies that cover some form of cyber risk. One participant noted that phishing and fraud typically aren’t covered by those policies, and that his firm has a separate policy to cover that risk for up to $1 million, for “next to nothing” in terms of premium. He emphasized, however, that companies must put in place training programs or face higher risk. Another noted an instance where a fraudster changed a remittance instruction and the company sent 350,000 euros to a destination in Poland. Fortunately, Citibank flagged the transfer and recovered the funds. “So we immediately issued a policy where changing the remittance instructions requires making a call to insure accuracy.” Another member took on a $5 million policy last year with a low premium but a $1 million deductible. “It’s important to have this cheap insurance but not rely on it,” he said. 
 
For more than two decades, NeuGroup has lead 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/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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