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

Blog entry
By afriberg, November 12, 2014

Key takeaway comes from FX Managers’ Peer Group meeting.

The FXMPG summer 2014 meeting took place in early September in New York, sponsored by Thomson Reuters and Reval. The meeting covered some new angles on risk management topics such as discussions on risk management philosophy and communication as applied to FX; China hedging, an ever-changing undertaking under the evolving internationalization of the RMB and members’ increasing exposures in this market.

In the group’s continuing series of FX program reviews from “Soup to Nuts,” members heard a thorough review of a member company’s program and the benefits and challenges of the introduction of a trading company structure.

One of the key takeaways of this session focused on comparison communication:

Peer comparison and constant currency as key report items: When communicating FX results internally, one key item to illustrate the efficacy of the program is to compare (using publicly available data) key competitors’ YOY growth due to currency on a quarterly basis, which allows you to demonstrates lower volatility in this metric than your industry peers. Another important item is a side-by-side of “as reported” and constant currency growth numbers.

For a more in-depth look at the key takeaways from this meeting, subscribe to iTreasurer.com, where you will find the executive summaries for the meetings of all groups in The NeuGroup Network.

The NeuGroup is the leader in peer knowledge exchange and intelligence for treasurers through its iTreasurer publication and The NeuGroup Network of 18 member groups serving more than 350 treasury and finance professionals across functions, industries and global regions.
 

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Blog entry
By Anonymous, November 03, 2014

Can Treasurers' Group of Thirty members continue to balance post-crisis incentives to fortify balance sheets, support changing businesses, and meet activist demands while tax rules tie up sizeable amounts of liquidity?

The Treasurers’ Group of Thirty met at Gap Inc. in October to discuss, among other things, current projects and priorities, working capital as a driver of firm value, reacting to the end of the dollar carry trade in approaching developing market currency risk, as well as the compliance demands of an array of recent regulatory requirements.

The projects and priorities discussion, in particular, outlined the major tension facing large-cap treasurers today: having survived the financial crisis and reacted in its aftermath, they are now forced to balance financial strength, support of changing business models, plus compliance and activist demands on cash all at once. And, all the while, US MNCs face powerful disincentives to use the pockets of cash growing off-shore to finance this balancing act at home. Something has got to give.

Members say they are dominated by capital allocation-related projects, especially efforts to respond to activist pressures with increases to share buybacks and dividend payouts. Adding to these pressures, is the constraint on liquid capital created by US tax rules that impede US corporates from tapping off-shore cash for domestic use.

HSBC, as the meeting sponsor, offered insights from Julian Roberts and John Dower, representing its working capital advisory group, to help members make the most of their working capital contribution to ROIC, which is emerging as the most significant driver.

A representative from HSBC’s FX advisory team, Ivan Asensio, later noted how the shift from a positive to negative US dollar carry trade with emerging markets is dramatically changing the way members must deal with FX exposure in these markets.

The Treasurers’ Group of Thirty (T30), the first NeuGroup for treasurers’ of large MNCs is the premier group for strategically-minded treasurers at Global 2000 companies from across industries. Members meet to discuss topics on their agendas, share experiences and discuss solutions to common challenges. For more key topics from this meeting, subscribe to iTreasurer.com.

The NeuGroup provides leading peer knowledge exchange and intelligence for treasurers through its iTreasurer publication and The NeuGroup Network of 18 member groups serving more than 350 treasury and finance professionals across functions, industries and global regions.

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Blog entry
China, SAFE
By mkmoore, October 24, 2014

The NeuGroup’s CEO and Founder Joseph Neu visits with SAFE Director General and President of its China Forex magazine Mu Zhiqian.

To reciprocate for his visit with The NeuGroup’s Assistant Treasurers’ Group of Thirty (AT30) at their HSBC-sponsored meeting last May, Joseph Neu, CEO and Founder of The NeuGroup met in Beijing this week with Mu Zhiqian, State Administration of Foreign Exchange (SAFE) of China Director General and President of its China Forex magazine. The purpose of the meeting was to continue the knowledge exchange established between SAFE and NeuGroup members to help them better understand China’s business environment, regulatory reforms and to support their businesses in the country with the best possible treasury capabilities.

As at the AT30 meeting in May, this dialogue was facilitated by Lewis Sun, Head of Sales for HSBC China’s Global Payments and Cash Management team.

Mr. Mu reiterated his offer made to the AT30 that he is happy to provide answers to specific questions that members might have and The NeuGroup is glad to serve as intermediary for these going forward. Helping communicate SAFE’s FX policies and reform efforts, as well as bridge the gap of understanding between SAFE and FX market participants, is part of his mission as President of China Forex. This bi-monthly magazine has a quarterly English edition and Mr. Mu provides frequent commentary in its pages.

Mr. Mu also oversees China Forex’s advisory council, which serves to communicate foreign exchange policy information and facilitate knowledge exchange between banks, enterprises, and SAFE. “It is not unlike your NeuGroup forum,” Mr. Mu noted. In addition, China Forex offers consulting and training services on FX and related policy issues to MNCs and other foreign investors. See China Forex’s English language website (www.safeforex.com.cn) for more information.

Key advice

Asked the key advice Mr. Neu should take back to NeuGroup members, Mr. Mu urged them to show patience with China’s reform efforts. These, he reminds, still follow Deng Xiaoping’s, China’s chief reform architect, philosophy of “crossing the river by feeling for the stones at the bottom.” Experimentation and innovation are still going to come in phases via pilot programs to test them in practice: “we want to see the potential negatives,” before implementing them more broadly.

When asked about the pilot fatigue that this reform approach is creating with MNCs, Mr. Mu encouraged members to be bold. SAFE understands and appreciates the time you spend when you participate in pilot programs, he noted. It will encourage first movers to benefit. Reforms are increasingly driven by real market demand, he said, thus members should ask for what they really need in practice, so that the pilot programs can do more to bridge the gap between  what is allowed in China and world-class operations. What Mr. Mu appears to be pointing out is that there is a yin and yang to doing business in China: you need to be patient and bold at once.

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Blog entry
By Anonymous, October 21, 2014

Friday, October 17th marked a milestone in The NeuGroup history as we held the pilot meeting of the Asia CFO Peer Group, a group for Asia-based regional CFOs of large western MNCs.

The meeting, held in Shanghai, also marked the third time that a new group has been launched in partnership with BNP Paribas, and we would like to thank them for their support with this initiative.

The speed at which this new group shared their challenges and actively sought solutions from one another was striking. Members support complex organizations in an environment of high growth, tight talent pool, dizzying regulatory evolution and intense scrutiny on compliance. The opportunity to compare notes with others in similar situations via the peer group model was very well received by the members of this new group.

Session discussions included:

The China CEO of L’Atelier, a specialty BNP Paribas subsidiary which offers eCommerce consulting services, discussed the growth rate and applications of eCommerce in China. The group was also interested to learn of a permissible bank account structure within the SFTZ that allows for a freer flow of operating funds between subsidiary company’s on-shore and off-shore.

The topic of staff development garnered much attention, as members discussed the need to focus their efforts on retaining their top performers and doing whatever is needed and possible to accomplish that. Battling for higher salaries, positioning for additional opportunities and exposure, and communicating to them their value are some of the ways this gets done.

The session on SSCs featured a case study by a member company which had recently set up a new SSC operation in Shanghai. The presenter wowed the group with their tale of the Herculean efforts to successfully incorporate into the new SSC the target activities of 67 legal entities in 13 countries over the course of 14 months. One participant described their reaction to the presentation as “truly inspired.”

The NeuGroup is very excited about the success of this event and the prospect of furthering our proven model of knowledge exchange to executive levels in China. If you would like information about this new peer group please contact Bryan Richardson at brichardson@neugroup.com .

The NeuGroup provides leading peer knowledge exchange and intelligence for treasurers through its iTreasurer publication and The NeuGroup Network of 18 member groups serving more than 350 treasury and finance professionals across functions, industries and global regions.
 

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Blog entry
By gcassone, October 07, 2014

A meeting highlight was a member-led discussion on what critical steps to take now in preparation for when a crisis hits, and how to ensure that treasury operations get running again.

The ninth meeting of the Engineering and Construction Treasurers’ Peer Group (E&CTPG) took place this week in New York City at BNP Paribas Bank, host and six-time sponsor of the E&CTPG.

Crisis Management “To Dos”
E&C members’ crisis to-do lists certainly lengthened after the session on maintaining business continuity in the event of an unforeseen stop in their treasury operations.
 
From on-site anthrax to company-wide system failure, members were presented various scenarios and asked to consider how prepared their treasury is to deal with the crisis, including which tools to employ given the severity of the situation and the security required to transact treasury business.

The active discussion that followed each crisis “for instance,” often generated more issues than answers. However, members agreed that tackling the low hanging fruit alone – back-up systems access, offsite staff and bank contact lists, alternate meeting location – could make a big difference in a crisis situation.

Beyond the more obvious fixes, the need for treasurers to look closer at what crisis plan is in place and fine tune their preparation was evident. Put simply, management planning and testing of back up operations today can save you some headaches tomorrow when a crisis suddenly hits.

And with the vast majority of the group responsible in whole or in part for their treasury’s business continuity plan, treasurers are expected to be ready for the unexpected.

Gain access to executive summaries from all meetings of 16+ practitioner-focused membership peer groups for senior treasury and finance professionals in The NeuGroup Network by subscribing to iTreasurer at www.iTreasurer.com.

The Engineering & Construction Treasurers' Peer Group (ECTPG) is the premier forum for treasurers at the world’s largest engineering and construction corporations. Members meet to discuss topics on their agendas, share experiences and discuss solutions to common challenges. The ECTPG is part of 16+ practitioner-focused membership peer groups for senior treasury and finance professionals with more than 330 members at 180+ companies and facilitated by The NeuGroup.
 

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Blog entry
By wchan, September 15, 2014

Treasurers in AsiaChange management takes much effort, especially in China where cultural norms are strong, and the regulatory environment is complex and evolving rapidly. Selecting a new banking partner in this environment, while revamping internal processes and workflows, may pose huge challenges.
 
The Asia Treasurers' Peer Group (ATPG) will discuss this topic at their upcoming late October meeting, where two corporates will share their experience in managing such challenges and key lessons learned. The meeting is hosted by Intel, and sponsored by Standard Chartered Bank.
 
ATPG members have access to proprietary research and interact with like-minded executives from across industries to exchange knowledge on member-selected topics. The members set the meeting agenda and drive all pre-meeting research. The twice-annual meetings allow for confidential discussions. Members also control access to the group by voting to approve new members.
 
The Asia Treasurers' Peer Group (ATPG) was founded in October 2011 for regional treasurers of large MNCs with treasury operations in Asia. As the first NeuGroup in Asia, it is the catalyst for other Asia-based NeuGroups, including a group in Shanghai and a new Asia CFO group, that serve our members in the region.
 
For 20 years, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its iTreasurer publication and the peer groups of The NeuGroup Network, which covers 16 member groups serving more than 330 treasury and finance professionals across functions, industries and global regions.
 

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Blog entry
T30-2
By jneu, September 11, 2014

The undercurrent of the recent T30-2 meeting was to position treasury as a provider of capital management and financial flexibility to enable large-cap MNCs to pursue real growth and not just remain stable cash distributors for investors.

The Treasurers’ Group of Thirty 2 met this week at Citi’s Sanford I. Weill Center for Strategy & Executive Development to discuss a range of topics including the need for financial flexibility in capital management, alternative approaches to supply chain and related financing, and a comparative review of member treasury organizations. The session on capital management, led by Citi advisors and with contributions from Standard & Poor’s, established the undercurrent for the meeting: treasurers should seek to maximize financial flexibility for large-cap multinationals to pursue bolder growth initiatives. Otherwise, they will continue on the current path of being stable cash distributors for investors. Activist targeting, which most participants expect will continue, may tend to reward distribution and financially engineered boosts to share price, but eventually shareholders (including activists) will demand real growth.

This undercurrent was seen in some of the meetings key takeaways, including:

  • TMS and transformation to better scale. Most members are in some phase of improving their treasury management systems and reviewing treasury org structure, particularly treasury and SSC alignment, to better scale and support global expansion.
  • Leveraging working capital for financial optionality. An area of growing attention by treasury is involvement in improving working capital for both their own firm and key suppliers and customers. New methods of pooling and securitizing trade payables (and receivables), moreover, offer risk mitigation and asset-backed financing alternatives. These financing methods also can compete with bank credit facilities on a cost of funds basis (as traditional facilities generate higher capital charges under new bank regulation) and serve as a contingent financing options for scenarios where CP, bond or bank market access gets restricted.
  • Continued attention to risk management. While the outlook for growth is improving and the ability to fund it in capital markets continues to be robust, a dispersion in views on rates and a return to volatility in FX markets (in part, in reaction to geopolitical tensions) will continue to link effective risk management to valuation benefits. Outsiders evaluating firms, from rating analyst to activist investors, will eventually come around to penalizing those that don’t have a capital plan that is attuned to both risk and reward. By enhancing flexibility, treasurers offer the plan better capabilities to respond to both.   

We thank all the T30-2 members for their active discussion and Citi for their contributions and sponsorship of the meeting.

The Treasurers’ Group of Thirty 2 is the second of three cross-industry executive treasurer-level groups in The NeuGroup Network. Launched in 2011, the T30-2 assists treasurers with current projects and priorities using leading peer knowledge and benchmarking supported by face-to-face discussion. 

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Blog entry
By gcassone, September 09, 2014

We’ve all heard the phrase “What gets measured gets done,” which is important for ensuring an efficient treasury operation. Certain data points can also illustrate treasury value-add, which is, in turn, important for career advancement.  But what and how do you measure? And what data points best highlight results to the senior management who can influence your career? This requires treasury leaders to measure for the purpose of efficiency, but also for marketing.

The Assistant Treasurers’ Group of Thirty (AT30) members will discuss and share their approaches to measuring, including a review of appropriate data points, examples of reporting formats, and messaging for marketing purposes, as well as how that data gets reported to those who can influence careers.

The AT30 meets in November in Memphis, TN, at FedEx World Headquarters, with RBS sponsoring the event.

The group will also look at the complexities of setting up a regional treasury center (RTC) and the challenges faced when managing treasury activities from a more local perspective. The meeting session will feature one or two members who will share their experiences including what activities an RTC should own and to whom it should report.

AT30 members have access to proprietary research and interact with like-minded executives from across industries to exchange knowledge on member-selected topics. The members set the meeting agenda and drive all pre-meeting research. The twice-annual meetings allow for confidential discussions. Members also control access to the group by voting to approve new members.

The NeuGroup provides leading peer knowledge exchange and intelligence for treasurers through its iTreasurer publication and The NeuGroup Network of 16+ member groups serving more than 330 treasury and finance professionals across functions, industries and global regions.
 

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Blog entry
By Anonymous, August 27, 2014

As globalization continues, treasury organizations must constantly balance the need for standardization and central control with individual country requirements that may cause exceptions to the global model.

The Global Cash and Banking Group will discuss the challenges of globalization and the processes they follow to maintain global control without hindering local activities at their upcoming October meeting.  The meeting is sponsored by Reval and hosted by Eaton in Cleveland, OH.

For another take on treasury centralization, see this article Optimizing the Global Footprint, on iTreasurer.com.

The GCBG members will discuss this and other topics as they gather with like-minded executives in this invitation-only peer group. Member set the meeting agendas and drive all pre-meeting research to focus on issues of real-time concern. The twice-annual meetings allow for confidential discussions around these topics. Members also control access to the group by voting to approve new members.

The NeuGroup provides leading peer knowledge exchange and intelligence for treasury professionals through its iTreasurer publication and The NeuGroup Network of 16 invitation-only groups, which serve more than 330 members across functions, industries and global regions.

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Blog entry
By Anonymous, August 20, 2014

Treasurers need to preserve financial flexibility to anticipate and rapidly respond to changing market conditions and strategic opportunities, without losing focus on the efficiency of the balance sheet.  An optimal capital management structure calls for an integrated approach with a range of strategies from better utilization of organic liquidity, to risk management techniques for reducing earnings volatility.

The Treasurers’ Group of Thirty 2 will discuss this topic in a roundtable discussion at their upcoming September meeting.  The meeting is sponsored and hosted by Citi in Armonk, NY.

As a member of our exclusive treasurers’ peer group, members gain access to proprietary research and interact with like-minded executives from across industries to exchange knowledge on member-selected topics. The members set the meeting agenda and drive all pre-meeting research. The twice-annual meetings allow for confidential discussions. Members also control access to the group by voting to approve new members.

The NeuGroup provides leading peer knowledge exchange and intelligence for treasurers through its iTreasurer publication and The NeuGroup Network of 16+ member groups serving more than 330 treasury and finance professionals across functions, industries and global regions.
 

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