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

Blog entry
By aorwick, November 17, 2017
Thank you to the members and guest attendees of NeuGroup’s ATLG 2017 H2 Meeting at Adobe Systems in San Jose, California, on November 8-9. 
 
Here are some highlights from the meeting:
 
Capital structure and the vagaries of tax reform. A member of the group quickly reviewed the key components of Republican tax reform now being mulled on Capitol Hill. It should be a net positive for his company and most other corporates, he said. However, its passage and the form it will ultimately take remain uncertain, and his technology company’s more immediate cash needs have created a quandary: should it pay today’s 35% repatriation tax, or wait for reform’s promised 12%, or take another route? The company is exploring financing alternatives with flexible repayment terms, so if reform happens that debt can be quickly paid off. Banks are now pitching bonds that are callable after one year, at a price of about five basis points on the call, and the company is also considering issuing commercial paper (CP) that could be backed up by its recently increased revolving credit facility.
 
Takeaway: Tax reform gets real. Between their meetings in the spring and November, more ATLG members—now at 53%—say they’ve quantified after-tax proceeds under scenarios with their tax departments. The biggest jump in focus was prepping various scenarios for senior management and/or the board—47% reported taking that step before the November meeting compared to 27% in the spring. 
 
Treasury’s career advancement conundrum. Corporate treasury departments today are increasingly lean and mean, staffed with highly specialized professionals. But how do their careers advance when the hierarchy within treasury is limited, and especially if HR fails to understand the necessary skills and competencies required of treasury executives? The assistant treasurer of a manufacturing group member addressed the issues of treasury organization and talent, after describing in detail the organizational tree and responsibilities of her own company’s treasury.
 
In one instance, she wanted to elevate an executive with the title of “lead” to manager. The person had been targeted as a potential treasurer at the company one day, and he wanted not only increased pay but the higher title to reflect the work he was doing and advance his career. However, HR only agreed to a 35% salary increase, arguing that he would have insufficient direct reports to justify the title, and the executive left the company. 
 
Another participant noted that HR must decide whether it wants to retain and develop talent within the organization, or expect churn in treasury staff as talent seeks opportunity elsewhere. 
 
Takeaway: Treasury is not for everybody. Providing opportunity for treasury staff to move to other parts of finance or even the business units can be a major plus. The AT said she had worked in controller, M&A and FP&A departments, arriving in treasury with broad experience. “I’m very open to moving people back and forth, and it creates advocates for treasury around the company,” she said. Another member of the group noted that Amex moved people around every few years and had record retention.
 
What are you protecting? Another member from a technology company walked the group through changes his office is making to the company’s FX hedging practices. He said the goal is to shift focus away from the management reporting impact, that is, the FX impact vs. quarterly or annual plan forecasts; since in that case the FX rate is chosen simply because it coincides with the plan forecasts. “The real issue is what is my underlying margin impact based on that yen business; not the impact relative to the forecast rate,” he said.
 
The company doesn’t want to stray too far from the quarterly earnings forecasts it gave Wall Street, so treasury has sought to coordinate the hedging program more closely with the business unit. By understanding better the timing and volatility of that unit’s currency exposure, treasury anticipates the hedging program resulting in a better economic outcome. 
 
Takeaway: Just the reporting, please. A participant said his company’s previous CFO toyed with the notion of allocating the hedge results to the business units to create more accountability. However, the business units balked at the additional burden, and treasury agreed. The new CFO isn’t seeking any changes, at least for now, so “we’re trying to improve reporting around the economic impact” of the hedges, he said. 
 
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 wchan, November 10, 2017
The Asia Treasury Peer Group met in Hong Kong for the first time on October 24-25, hosted by Emerson Electric. Members discussed their projects and priorities and local bank partner challenges, heard from a guest speaker on setting up a treasury vision and values to align with the business and about online third-party payment providers.
 
We also heard from a visiting US NeuGroup Network member on transforming treasury for the digital future and received an update
on Hong Kong’s corporate treasury centre incentives from the Hong Kong Monetary Authority (HKMA). Here are some highlights: 
 
Who’s Your Customer? Our special guest from a China-based MNC led a session on how treasury partners with business units to help drive growth that turned into an existential exploration of treasury’s broader mission and the related need for treasurers to answer the question who is treasury’s real customer. Identifying one’s core customer is an extension of determining what role treasury plays in the broader corporate organization and whether the tack it takes in managing cash and financing is largely geared toward promoting sales and supporting business units, or driving a more controlling strategy focused on compliance, policy and governance.
 
Solving the “M&A Integration” Equation. This is a case where one size doesn’t fit all and where priorities including growth and the pace of acquisitions must be weighed against what treasury’s control and compliance policies may dictate. Nonetheless, treasury needs to develop a systematic approach to integrating newly acquired companies into its finance orbit and to communicate with the new unit quickly and clearly. The plan needs to reflect the realities of how long it takes to integrate policies and data and whether the pain of changing bank accounts and other systems is worth the cost right away. Many companies will find selective integration is the best path forward, giving business units flexibility (not autonomy) and maintaining treasury’s supervisory role to ensure compliance and control over acquired companies.
 
Technology Disruptions - Digitalization and Online Third-Party Payment Systems. The group watched a demo on how easily machine learning and chatbots can be incorporated into the treasury toolkit and what this means for team skill development and treasury roles going forward. Whether it’s developing apps to improve cash flow forecasting and FX exposure analysis or using online third-party payment systems, treasury needs to drive the process of embracing the innovations that are coming fast and furious in the digital age. Treasury can burnish its strategic role within the organization by keeping abreast of fintech developments, assessing which ones make sense to discuss with senior management and by making a strong case for using internal resources or utilizing external sources to tap into advancements that are transforming business models and how treasury does business.
 
Outlook
The viability of regional treasurers in Asia depends on companies ensuring treasury contributes strategic value to business units in a region that contains both challenging frontier markets and the world’s largest population. The key to creating compelling treasury career paths within western multinationals is better integration with business units in Asia. Focus should be put on developing the skills required for evolving treasury roles, as departments face increasing pressure to centralize traditional activities and to use technology to do transaction processing. 
 
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, November 09, 2017
The Tech20 Treasurers’ Peer Group met November 1-3 at Cavallo Point near San Francisco for its 2017 Annual Meeting. Returning sponsor BNP Paribas shared the latest on the bank’s strategy, telling members that the Americas and the tech sector remain priorities.
 
Following are some key takeaways:
 
• Solve my problem: help with formulating an FX risk policy. A member from China at a company without a full risk policy asked the group to help him with formalizing a policy for FX risk management. He noted that benchmarking revealed how tech firms varied between one without an FX hedging program and those with high-level sophistication in this area. Members advised him to consider carefully the FX risk management objective when setting policy. For revenue or earnings hedging, for example, he should consider to what extent analysts were focused on the FX impact and if a pro forma ex-currency reporting strategy could allow a lighter hedging touch. Over the long run, the currency impact on revenue or EPS can tend to even out and hedging is more a matter of appetite to ride out a cycle or not. New hedge accounting is also making it difficult to keep hedge gains and losses below the line and instead will hit the hedged item line. The final recommendation: try not to lock down all the details in the first go, since the policy needs will get further clarified as the FX program develops.
 
• Transforming treasury to follow the sun. A major tech company shared its dramatic overhaul of the treasury organization that aims to scale support for the business to super mega-cap size, including follow-the-sun coverage with new treasury centers in London and Singapore. This represents a departure from a tech treasury mindset that has tended to be entirely HQ centralized. Treasury leadership is also being divided into four functional ATs to develop centers of excellence for treasury operations, trading and investments, risk and strategy, and corporate finance. “Yet, we don’t want treasury to be carved up into silos so people will regularly migrate across,” said the AT presenting. 
 
• Banks pulling out more stops to fund acquisitions. In a session spotlighting recent examples of acquisition finance, we learned of the advantageous terms members are negotiating. In one instance, a member got their then-M&A advisor to fund a bridge facility without draw or duration fees. In another, a member was able to hold the deal underwriters to their agreed fees despite changes to the financing mix as the deal evolved. The takeaway is that competition for new, highly desired customers, additional wallet from current, valued clients and bank balance sheets that have been finessed to function under today’s regulatory environment are changing the constrained nature of acquisition finance. It’s a sign of bank financing terms getting even friendlier in a credit cycle that’s long in the tooth.  Capital markets are a positive contributor, too, as the money and demand is still there to take out any deals members might contemplate.
 
A Christmas tax reform miracle, zombies and wizards. The group discussed the details of the House tax reform bill that arrived during the meeting, with the consensus being positive surprise at the level of detail. The motto “time kills all deals” applies here as more time will allow special interests to mobilize opposition to specific details in what is a generally favorable reform plan. A signing ceremony with Trump in front of the White House Christmas tree would take a miracle but that’s what may be needed to get a meaningful tax reform bill passed. Finally, you also missed a lively discussion of tax zombies that won’t die (the border adjustment tax); and why treasury needs to abandon any notions that tax departments are staffed by wizards who wield some sort of magic. 
 
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, November 07, 2017
The Internal Auditors’ Peer Group wrapped up its 2017 calendar with a solid day-and-a-half meeting in San Jose, California. 
 
Members of the IAPG discussed a wide range of topics at the 2017 second-half meeting, among them a look at annual and quarterly risk assessments, acquisition integration, post-systems implementation audits, data protection and fraud risk assessments. Some of the key takeaways from these sessions included discussions on robotic process automation; complying with new realities and rules (in Europe and possibly on the way in the US) about data, particularly personal data; and how sidebar conversations about “what’s really going on” make auditors trusted confidantes to business leaders.
 
Is the ROI in RPA really there? Robotic process automation (RPA) is a hot topic in many treasuries and other departments across companies. The promise is that companies can eliminate human error risk on tasks that are repetitive and rules-based. But is this a case of fools rushing in? This was the view of one presenter at the meeting, who questioned the return one could get from implementing RPA. “If this was just coming into being perhaps five years ago, I could see this really catching on,” he said. But right now, companies have solved for the cost issue by outsourcing to lower-cost countries. “RPA is so hot that people want to implement it without thinking it through.” But the truth of the matter is, right now, highly educated, low cost workers in some countries can still get these mundane financial tasks done, i.e., basic back office transactions, far more cheaply. And another view: “We always have manual intervention in RPA software,” said one member. So it could be a while before RPA is truly an option.
 
Audit whispers. In presentations to the audit committee, several members said they often put, in addition to the main points of their audit reports, a sidebar of issues they’ve “heard” unofficially. In at least one instance, this has become more popular than the audit report itself. So IA can often find itself in the position of the company “truth tellers.” The ones with the sober view of certain projects or endeavors of the company that a CEO can appreciate. For instance, for very high sales goals in a tough environment, the head of sales will just say “we can do it!” But an auditor might say, “Yes, they might be able to; but it will be tough and perhaps IA will be looking closely at results to make sure there was no fraud.” The drawback to these side conversations is that they can be dangerous or misconstrued; people may use this format as a political device they can manipulate in their favor. They may have an axe to grind against a team or individual or even the company. Therefore, auditors who find themselves in this position must clarify the context of the information being given (this wasn’t an audit, etc.) and the receiver must be clear that this isn’t actionable intelligence; just information that bears watching.
 
Data scrubbing. Data in the cloud is growing exponentially, and so are the threats. And in Europe, new regulations are coming online in a couple years that will make data management that much more onerous. 
 
While the cloud has made life easier for just about everyone and every business, it has had it downsides. For business, the cloud intensifies the third-party risk management to crisis levels. One cloud server can have thousands of connections to external entities, thereby increasing the risk. The problem is at this early stage of the technology, there are a lot of ambiguities: from minimal transparency to vague regulatory expectations. On top of this, the speed of change in technology has exceeded the capacity for companies to change. “Point-in-time assessments expire before re-evaluation,” noted one slide in the session presentation. This presenter’s recommendation was to “optimize levels of risk assessment effort by choosing your vendor-risk-management battles.”
 
Meanwhile, regulations are coming. In Europe, it’s the General Data Protection Regulation (GDPR) agreed upon by the European Parliament and Council in April 2016, which will replace an older version of the regs (Data Protection Directive 95/46/ec) in spring 2018. This will be the “primary law regulating how companies protect EU citizens' personal data.” While still not taken up in such a singular form in the US, a similar law in the US is expected; and many in the group are preparing, dedicating teams to address the somewhat burdensome privacy and data protection requirements. These include: 
 
• Requiring the consent of subjects for data processing
• Anonymizing collected data to protect privacy
• Providing data breach notifications
• Safely handling the transfer of data across borders
• Requiring certain companies to appoint a data protection officer to oversee GDPR compliance
• The GDPR mandates a baseline set of standards for companies that handle EU citizens’ data to better safeguard the processing and movement of citizens’ personal data.
 
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, 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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