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

Blog entry
By Anonymous, August 18, 2014

As US companies become increasingly connected to the global marketplace, operating in emerging markets is becoming more common. However, most emerging market exposures are expensive to hedge and local regulations can make the execution of hedge contracts cumbersome and difficult.

The Treasurers’ Group of Thirty will discuss this topic as part of their upcoming October meeting. The meeting is sponsored by HSBC and hosted by GAP in San Francisco, CA.

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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Blog entry
By Anonymous, June 26, 2014

Pension managers frame de-risking strategies in recent NeuGroup Network member webinar.

Pension managers from NeuGroup Network member companies met virtually for a webinar yesterday to discuss pressing issues for corporate plan sponsors of defined benefit plans. Steve Shepherd, a partner from Hewitt Ennis Knupp, helped frame discussion of the key question: What plan sponsors should be asking with regard to shedding risk? 

As part of this larger question, these questions were addressed:

·       Are you being dumb by doing nothing to de-risk now?

·       What about insurers’ reasons for buying pension risk don’t plan sponsors fully believe?

·       How to avoid getting trampled when the herd decides to exit at once?

If you would like to help your pension manager have answers to these kinds of questions, you may want to involve them in this pilot group. Contact us here to be considered for membership.

In response to member companies with DB plans, The NeuGroup is piloting a pension manager group with select NeuGroup Network member companies to help them exchange peer knowledge on how to mitigate pension risk and best manage the pension portfolio in the current environment. 

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Blog entry
By jneu, June 26, 2014

As part of recent NeuGroup Network member webinars, TTS managers consider trends in systematizing next-gen treasury centralization platforms.

Last week, treasury technology solution managers from NeuGroup Network member companies met virtually for the second time. They heard one member-company describe a project to build a next-generation in-house bank with pay-on-behalf-of (POBO) features to further centralize payments and eventually collections, with receive-on-behalf-of (ROBO) features. Many large MNCs are somewhere in the life-cycle of similar projects and the systems ramifications are substantial. Later in the session, the group shared notes on hosting best practices, looking past the SaaS, cloud and private-cloud hype to determine how well vendors do when you let them host the treasury management system (TMS) for you.

Among the key questions addressed:

  • When does your ERP set-up require PINO/RINO vs. POBO/ROBO?
  • Why ROBO is still hampered, even with SEPA-furthered XML standards with dedicated fields for remittance advice?
  • What set-backs are in store when the single-instance, ERP goal of your centralized treasury vision is at odds with what best supports the diverse lines of business?
  • Do TMS vendors deliver on the services you expect from a hosting provider, apart from controlling the environment where your system operates?
  • Which major TMS vendor is approaching clients with a new consulting arm?
  • Which TMS vendor is causing at once hope and concern with a new minority ownership stake?

If you would like to help your treasury technology manager have answers to these kinds of questions, you may want to involve them in this pilot group.

The NeuGroup is working with a select group of treasury technology solution managers from NeuGroup Network member companies to help them exchange peer knowledge to better match treasury processes to available systems and applications, as well as push for new solutions with adequate support from both internal and external sources. 

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Blog entry
By wchan, June 04, 2014

Shanghai Free Trade Zone and capital markets in Asia top the members’ discussion list.

The Asia Treasurers’ Peer Group (ATPG) held their sixth meeting in May 2014, which was hosted by Hewlett-Packard and sponsored by Australia and New Zealand Banking Group Limited (ANZ). This was ANZ’s first sponsorship participation with The NeuGroup. Members began the meeting by exchanging notes on their 2014 objectives and projects. The NeuGroup shared brief highlights of its historic milestones as tribute to its 20th Anniversary, and spoke of exciting new initiatives such as the China CFO group.

Following are a few highlights from the meeting:
(For a more in-depth look at the key takeaways from this and other groups in The NeuGroup Network, subscribe to iTreasurer at iTreasurer.com.)

China. China remains a key focus for this group, given the significant size of business operations there for member companies, and the Shanghai Free Trade Zone (SFTZ) is a "hot topic.” Progress here seems disappointing for both the regulators and corporate participants, as the pace of change is far slower than wished for. There is a sizable gap between reform excitement and leaden reality. Corporates are jaded by "Pilot Fatigue,” while treasurers are constantly weighing the benefits of first-mover advantage versus awaiting nationwide policies, which provide clarity and detailed guidelines learnt from the "pilot" experiments.

Capital Markets in Asia. Motivated by diversification of funding sources, some member companies are exploring attractive market opportunities that exist in the Asia capital markets. Members shared experiences on asset-backed securitization in China, and forewarned of the huge amount of paperwork and regulatory-related work involved. ANZ gave an overview of the AUD, SGD and CNH bond issuance market. It is interesting to note that the SGD and CNH bond issuance markets do not require a credit rating on the issuer, allowing issuers to take advantage of local brand recognition in the fine pricing on such bonds.

Asia Treasury Organizations. There is a wide spectrum of complexity in member companies’ business structures depicted by the number of legal entities and bank accounts, and thus a similarly wide variety of treasury organizations in Asia is required to support member companies’ growing business in the region. Asia treasury teams are diverse in size, scope of work (global functional vs. regional business support), reporting lines, and geographical responsibility. Each member shared information about their team structure, and the activities done locally, regionally or centrally from a global hub.

In addition, ANZ gave their views on the economic outlook for the region and useful insights on Basel III. We thank all of the members and representatives from ANZ for their contributions to the discussion and overall success of the meeting.

The ATPG was founded in October 2011 for regional treasurers of large MNCs with treasury operations in Asia. As the first NeuGroup in Asia, we expect it to be the catalyst for other Asia-based NeuGroups to serve our members in the region.

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 jneu, June 03, 2014

We thank all members for their active contributions to the dicussions at the Bank Treasurers' Peer Group Annual Meeting last month at the Waldorf-Astoria in New York.

The dominate theme of this year’s10th Annual meeting was that supervisory stress-testing (and capital plan reviews) have become so all-encompassing that banks must harness them to manage the bank. This is especially true for bank treasurers, who can quickly find themselves spending the vast majority of their time both leading and back-filling the efforts of other functions assigned to the task. In response, treasurers must encourage senior management and the Board to provide them with help. Often this comes in the form of a centralized, value adding project management organization (PMO). This coordinating PMO must also ensure that the risk, credit and other functions integrate their normal responsibilities with the ever more stringent supervisory requirements.

The NeuGroup also thanks first-time BTPG sponsor Morgan Stanley for their support of the group and its Annual Meeting. Morgan Stanley Treasurer David Russo set the tone for the stress-testing "sustainabilty" theme with a presentation of his bank's approach and also stressed the need to integrate regulatory concepts and obligations into core bank treasury management. Fittingly, CCAR Sustainability was the title of EY Consultant Adam Girling's presentation in the same session.

Further dialouge with the bank treasurers chaired by Morgan Stanley Global Co-Head of FIG Capital Markets Kevin Ryan on regulatory capital vs. economic capital also confirmed that stress-tested capital is rapidly replacing economic capital models as a risk-based measure and constraining captial metric. Also, models, systems and the data that goes in them are being surrounded by common frameworks or common system platforms that must fulfill both stress-testing and bank management mandates, according to dicussion led by Charles Richard of QRM and Tom Day from Moody's Analytics. Member discussion throughout the two-day meeting reeinforced these main themes.

The Bank Treasurers' Peer Group (BTPG) was founded in 2005 for a select group of US regional banks. It meets annually and conducts periodic conference calls for members to share experiences with topical issues.   

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Blog entry
By gcassone, May 20, 2014

The spring 2014 meeting of the Assistant Treasurers’ Group of Thirty (AT30) took place May 6-7 in Princeton, NJ, hosted by Bristol-Myers Squibb and sponsored by HSBC. This was the fourth meeting of the AT30, which featured a number of guest speakers including the treasurer from Honeywell, a former treasurer from GM and the Director General of China’s State Administration of Foreign Exchange (SAFE).

The Path to the Treasurer’s Office
An open dialogue with Jim Davlin, formerly of GM, and John Tus of Honeywell, two experienced treasurers, provided insight into how to land the treasurer’s role in your organization. Taking positions outside of treasury and developing company relationships were noted as the key elements to carving out a path to the coveted office. Both guests emphasized the benefits of knowing more people and understanding the underlying business in order to get on the A-list for consideration. Members were told that behavior and leadership qualities will outweigh technical skills, and that crossing over from individual contributor to leader is also critical to acquiring the experience one needs in order to be considered for the top treasury role.
   
In a related session, Developing Employees for the Long Haul, members continued their active discussion on treasury roles and people management. Members pointed out that providing rotational opportunities and regular development talks help to keep employees engaged and communications open. Additionally, many companies have a process in place to identify top performers in order to develop and retain high potential employees.

Currently, the AT30 has now reached its membership capacity. The NeuGroup is looking to start a second group for assistant treasurers. Click here to contact us about membership. https://neugroup.com/contact

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, May 15, 2014

Members of the Corporate ERM Group talk about integrating ERM at their Spring meeting.

Enterprise risk management is a relatively steady discipline, without governing bodies imposing new regulation, or significant developments in technology or theory. However, one thing that does change is the growth and maturity of individual programs, which was evident at the Corporate ERM Group’s seventh annual meeting in May, hosted at Intel’s offices in Hillsboro, OR.

Members addressed the ever-evolving themes of integrating ERM with strategic planning and the related operationalization of ERM into the businesses beyond governance and reporting functions, getting to the heart of ERM culture. Given recent events, cyber security also played a prominent role in the meeting, as did the management of black swan events—cyber and otherwise.  

Below are a few highlights of the meeting:

(For a more in-depth look at the key takeaways from this and other groups in The NeuGroup Network, subscribe to iTreasurer at iTreasurer.com.)

  • ERM and strategic planningall year round. Key to one company’s successful integration of ERM into strategic planning is having a board and CEO that not only fully support the program, but also requested that it be created. The board sees ERM as a strategic priority for the company and wants the program to be world class in status. While many companies’ ERM programs are characterized by an assessment calendar with a 12-month cycle, this program has risk discussions all year long. There are certain calendared steps along the way, but ERM is not allowed to slip into the background between scheduled discussions.
  • Look at operationalization data. A new but related twist on working ERM into strategic planning is the notion of “operationalizing ERM,” the idea that ERM thinking is so ingrained in the business that it is not a separate activity but a natural component of operations. Illustrating the importance of ERM, one company has developed a proprietary in-house tool for gathering risk data from business leaders. The tool makes no assessment or judgments, but organizes the data to inform all relevant parties and ensure effective discussions.
  • Cyber security education.  An early and unsettling remark in Intel’s Chief Security and Privacy Officer’s discussion of cyber security was that “most IT security people don’t get the enterprise element of this risk.” Using the example of what could happen if a breach occurred at a national payroll processing company through just one computer, he emphasized that employees need to understand the basics of how their own cyber security measures work. This includes knowing when files are and are not encrypted, understanding that someone can use one employee’s unscrupulous clicking to hack into enterprise data, and keeping informed about new vulnerabilities.
  • Management vs. optimization. Not all risks are universally harmful. Some can be leveraged for business expansion and increased profitability, as illustrated by one member of a privately held company that views risks as opportunities for increased return on capital. Much of this balance between mitigating and accepting risk depends on risk appetites and cost-benefit analysis, but sometimes a loss from a risk is small enough in comparison to the potential gain from taking it that it’s worth the gamble…with appropriate stops in place.   

The Corporate ERM Group, the NeuGroup for MNC heads of enterprise risk management, is an invitation-only group for senior executives who have direct oversight or who are champions of ERM and alternative risk-finance initiatives. Members meet to discuss topics on their agendas, share experiences and discuss solutions to common challenges. For more about The NeuGroup Network or peer groups, go to neugroup.com. For more key topics from this meeting, subscribe to iTreasurer.com.
 

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Blog entry
By afriberg, May 13, 2014

The spring 2014 meeting of the EUROTPG took place last Wednesday in Geneva, Switzerland, hosted by Ahold and sponsored by Reval. The event marked a ten-year presence for The NeuGroup in Europe with the EUROTPG, as well as the 20th anniversary of The NeuGroup as a company.

A round of introductions kicked off the meeting. Some of the projects noted by members included cash management and treasury systems RFPs; payments centralization, including a “lifting and shifting” local payments to a central payment utility; and a number of country-specific concerns, e.g., China, Russia and Ukraine, as well as some challenging African countries.

Global Business Strategy and Impact on Treasury
From emerging market development to mergers and acquisitions or operations expansions, many treasurers are challenged with proactively preparing for and supporting global company strategies. Reval’s Nigel Sirett led the session and gave an overview of Reval’s history and development, starting with the software-as-a-service (SaaS) approach and the risk management and hedge accounting that started it off, followed by acquisitions that add capability to the offering (rather than an acquisition rationale based on cash generation or client base), most notably ecofinance in 2010. He also noted a few trends that affect treasury processes and technology choices.

Next-Level Strategy; Talent/Technology
Many treasurers and CFOs are evolving their treasury organizations to become strategic centers of expertise in order to better support business growth in an increasingly volatile market environment. In order to do this, treasury leaders are challenged to find ways to attract new talent to their organizations while simultaneously providing development and growth opportunities to retain existing talent.

Key Takeaways:

  • The job ad and the actual job: Treasury is a hard job to recruit for and the question is, “Who are you recruiting and for what? “
  • The right tools motivate: Reval’s main point of view on the disconnect – which often results in demotivated treasury staff – is that the right technology can strip away more of the unsexy stuff and free up time for the more value-adding and rewarding aspects of the treasury job.

Bank Scorecards, Counterparty Risk, Credit Metrics
Based on a detailed member case study (available to EUROTPG members only), the group had a lengthy and in-depth discussion on key metrics on bank performance and methods for tracking and communicating the status of their bank relationships.

Key Takeaway:

  • Rationale for a structured scorecard: The company that was subject to the case study used to have a relatively informal bank relationship tracking approach, but developed a more structured one around the time of its most recent credit-facility refinancing. The key questions treasury wanted answered were: (1) Which banks do we want in our facility?; (2) What skill sets and capabilities do we need for the medium term?; and (3) Can we service the banks in the facility with enough business?  

The next meeting of The NeuGroup’s EUROTPG is scheduled to take place on November 20th (with a dinner the night before) at a convenient location in Europe. To learn more about membership in the group, contact afriberg@neugroup.com.  

For a more in-depth look at the key takeaways from this and other groups in The NeuGroup Network, subscribe to iTreasurer at iTreasurer.com.
 

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Blog entry
By Anonymous, May 06, 2014

The Treasurers’ Group of Thirty celebrates 10 years of peer knowledge exchange.

Efficiency and innovation continue to interest members of the Treasurers’ Group of Thirty (T30) at their spring meeting sponsored and hosted by Standard Chartered at their Manhattan offices. This is the tenth year that treasurers have gathered to discuss topics on their agendas, share experiences and discuss solutions to common challenges. T30 was the first group for treasurers at large MNCs in The NeuGroup Network’s premier collection of 16 membership-only peer knowledge exchange groups.

The members took a look at effective strategies for managing FX hedge exposures and defining liquidity requirements, and received an update on China’s continued initiative to internationalize its currency with a presentation by Standard Chartered on ways treasurers can get an edge on competition by optimizing the developments shaping China.

Other key topics included:

(For a more in-depth look at the key takeaways from this and other groups in The NeuGroup Network, subscribe to iTreasurer at iTreasurer.com.)

  • Rationalization still matters. Although economic statistics show that the worst of the crisis is behind us, members are still feeling the pinch to rationalize their global treasury structures and eliminate expenses where possible.
     
  • APB23 – It has only just begun. Many members voiced concern over the amount of audit scrutiny they’ve received over the past audit season as it relates to the APB23 certification that requires US multinationals to assert that its foreign investment is permanently reinvested so there is no current or deferred US tax liability.
     
  • The trend toward less is more. When considering market trends for FX hedge strategies, Standard Chartered shared information that showed companies are focusing more on optimizing hedges of material exposures over systematic approaches that previously focused on hedging everything.  Large sophisticated corporate clients are taking time to identify and understand their company’s efficient frontier and are using simpler products to manage these risks for G10 currencies.  Layered programs are more popular than static approaches, and most members seek 133 hedge accounting on all hedges.
     
  • RMB breaks into top ten. Given the rapid pace of renminbi regulatory changes, and the uptick in global MNC adoption of these new measures, there has been a significant increase in the use of RMB for payments, moving the RMB into the #8 spot as a SWIFT payment currency.

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.

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Blog entry
By Anonymous, May 02, 2014

With the prospects of a significant rise in rates remote and volatility within the fixed income sectors tempered, Treasury Investment Managers' Peer Group members marked their 19th Annual Meeting, sponsored by Dimensional, by focusing on various ways to improve operationally and continued the discussion on adding yield to the investment portfolio in a low-rate environment.

Try to beat the market not outguess it. David Booth, Chairman and Co-Chief Executive of Dimensional Advisors, kicked off the conference outlining Dimensional’s investment philosophy, which is based on strong empirical support. Dimensional believes the market is a better analyst than any person, and uses the market to develop insights and calibrate risk.
 
Benchmarks provide the much needed measurement. A case was made that benchmarks may sway the motivations of the external managers, and not always in a positive manner. If this is the case, why do we use benchmarks?

Opinion on custodians was not pretty. The overwhelming majority of members rated their custodians as good, certainly not great. This is a surprise as the custodian is such an essential component of a successful investment program.

The fixed income big bang, TRACE. The veil of transparency has been lifted, notes Joe Kolerich from Dimensional. Trade Reporting and Compliance Engine (TRACE) is the FINRA developed vehicle that facilitates the mandatory reporting of over-the-counter secondary market transactions in eligible fixed income securities.

The Treasury Investment Managers’ Peer Group (TIMPG) is a membership group for practitioners with principal responsibility for managing the investment of excess cash at corporates with sizeable cash portfolios. Members meet to discuss topics on their agenda, share experiences and discuss solutions to common challenges.

For more key topics from this meeting, subscribe to iTreasurer.com.
 

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