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

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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Blog entry
By jneu, April 29, 2014

Activists still helping to feed fixed income investors' appetite for tech sector debt.

The Tech20 met last week at Oracle for their Mid-Year meeting. Bank America Merrill Lynch updated members on the situation in debt capital markets, which remain very receptive to tech issuers. Fed tapering and, with it, a timetable for rate hikes, has done little to change this. With activist shareholders still pressuring tech firms for a return of cash, the continued ability to issue debt to fund share repurchases and dividends is welcomed by members.

Also on the agenda was a discussion on how treasurers should best engage with their banks on the impact of bank regulation on the products and services they offer, wallet allocations and the nature of their relationships. This was followed by an update on how members are positioning or should be thinking about positioning their cash portfolios in light of rate expectations, increasing levels of cash distribution and the prospect of US tax reform within a five-year horizon.

We thank all the Tech20 members who participated last week as well as Bank America Merrill Lynch for supporting the meeting with their sponsorship.

The Tech20 Treasurers’ Peer Group was formed in 2001 and remains the premier forum for treasurers in the tech sector.  It was the first of its kind in the treasury space and helped launch a network of now 16 practitioner-focused membership peer groups for senior treasury and finance professionals facilitated by The NeuGroup.

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Blog entry
By mkmoore, April 10, 2014

The Asia Treasurers' Peer Group (ATPG) is scheduled to meet on May 19-20, where members will check in with one another on how they’re dealing with the ongoing challenges in the region, plus their priorities and projects for 2014.

Agenda planning for the meeting has begun, and topics range from Shanghai Free Trade Zone and China liquidity management to capital markets in Asia with a focus on the opportunities for issuers and investors. China remains in the spotlight for Asia treasurers, given its market size and regulatory complexities. China’s policy statements and intents are one thing, but the reality of what benefits can be achieved using the FTZ status and implementation hurdles are key aspects on the minds of Asia treasurers. In addition, members will discuss the myriad economic and regulatory landscapes across Asia, and the relevant implications for the diverse member profiles within the group.

The meeting will be hosted by Hewlett-Packard. The NeuGroup is pleased to welcome first-time sponsor ANZ to be part of this event, and is excited to gain insight from this strong regional bank.

As usual, the meeting should prove to be a robust exchange of knowledge among astute treasury professionals based in Asia. The NeuGroup extends an open invitation to any of our members considering a regional expansion of treasury into Asia to join us for one of our meetings in Singapore. Click here to contact us about membership.

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, we expect it to be the catalyst for other Asia-based NeuGroups to 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 the peer groups of The NeuGroup Network and in intelligence for treasurers through the publication iTreasurer.

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Blog entry
By jneu, April 09, 2014

PwC's summary of its 10th annual, 2014 state of internal audit survey sounds the alarm on the perception that Internal Audit functions are failing to meet expectations on value add to their organizations. Accordingly, a blueprint for change is needed to better align stakeholder expectations and audit function skills and capabilities. Or, alternatively, which is not  the direction that PwC promotes, the evolution of audit away from traditional assurance to more advisory-oriented, "trusted advisor" activities will need to be rethought.   

The heart of the matter, as PwC puts it:

"More than half (55%) of senior management told us that they do not believe internal audit adds significant value to their organization. Nearly 30% of board members believe that internal audit adds less than significant value. On average, only 49% of senior managers and 64% of board members believe internal audit is performing well at delivering on expectations."

It is senior management (along with line managers who also are not valuing IA to the degree desired), among internal audit's stakeholders that PwC sees as the clear leading indicator. Boards/audit committees have not reset expectations to the new dual audit role. "I wonder if the audit committee has an appreciation for how the pendulum has swung for internal audit," as they quote one Chief Compliance Officer from a Fortune 50 consumer products company.

Arguably, this message from PwC will serve up more tension for CAEs and their direct reporting line to the Audit Committee/Board focused more on assurance and their more dotted-line accountability to other stakeholders on other forms of value add. It is never easy to serve two masters with differing objectives and expectations equally well. Plus, have PwC and others promoting the "trusted advisor" audit role set expectations too high? 

There are also considerations in PwCs blueprint to meet the dual role expectations for staffing, which is on the agenda for the upcoming IAPG meeting.

PwC quotes our IAPG member from Microsoft, Melvin Flowers:

"Internal audit needs to be able to be in the business conversation and show they understand the business objectives. Internal audit won't have a seat at the table if they don't understand the business and have credibility in management's eyes. Teams need to be transforming and hiring people outside the box. The skill set is totally different today. We used to hire the best accountants. Now we need someone that is as good with communication and able to listen, in addition to having good technical knowledge. If internal audit thinks their job starts with the balance sheet, they are going to be wrong. Their job starts with the business objectives and where the company is going. If they focus on the business objectives, they will be aligned to the critical risks of the organization."

Good food for thought and further discussion.  Read the whole report here.

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Blog entry
By Anonymous, April 09, 2014

Manual processing and lack of visibility are two major drivers to new technology, confirming that process improvement continues to be a priority for most treasury organizations.  That was one of the conclusions of a webinar hosted by the NeuGroup and partner Treasury Strategies, Inc.

Highlighting the timeliness and urgency of TMS implementations, the webinar, introduced by Geri Westphal, Director Peer Knowledge Exchange, was based on member feedback over the past NeuGroup meeting season. The webinar also covered industry consolidation, TMS functionality and asking the right and tough questions when it comes to implementations.

Laurie McCulley, Partner at Treasury Strategies, Inc. led the group through a variety of treasury technology objectives members should consider when selecting a TMS solution. She pointed out that there is "no one clear winner in TMS functionality” and encouraged members to carefully prioritize their objectives in order to select the solution that best meets those needs.

There also is a clear move toward industry consolidation with Wall Street Systems and Sungard as two primary examples of vendors merging platform solutions under their particular brand umbrellas.  This has led to the important question of future support, and members should carefully vet these concerns before locking into what might be deemed a sunset solution from a vendor’s perspective.

Treasury system functionality trends include an increased focus on process mapping functionality to allow for unique workflow analysis and approval processes, robust dashboard functionality, comprehensive risk management capabilities and mobile technology.  As treasury needs expand, so do the requirements they are demanding as part of their TMS solution, forcing treasury technology vendors to actively enhance functionality to include these new requirements.

A final bit of advice for those on the road to TMS vendor selection is to get up close and personal with RFP finalists.  Ask the hard questions and make sure you are happy with the answers.  Get the vendor to provide a real demo, not just a PowerPoint presentation.  Budget conservatively and assume the estimate for implementation costs will be 1-2 times the license costs. 

Thanks to all members who joined the webinar and good luck on your TMS implementation journey!  

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Blog entry
By Anonymous, March 28, 2014

In response to member interest in treasury management systems and related treasury technology trends, The NeuGroup is partnering with Treasury Strategies, Inc. to present a one-hour webinar that will address trends in corporate requirements and a variety of vendor solutions. Topics include:

• Treasury technology objectives and examples of best practice architecture
• Industry trends and functional requirements, includes Treasury Strategies’ survey results on SaaS v. installed and ASP deployment options
• Detailed information on various vendor platforms

The webinar is scheduled for April 8, 2014 at 1pm CT.

This event is just one of many informational and networking events facilitated by The NeuGroup for our leading member practitioners. At the end of February, The NeuGroup held a conference call with members to discuss the unfolding crisis in Venezuela, challenges accessing dollars and planning for the new currency regime. These webinars and conference calls complement the face-to-face knowledge exchange at The NeuGroup’s regular cycle of meetings.

“The NeuGroup continues to look for ways to deliver value for our members both across our network of groups and in between meetings,” notes Geri Westphal, Director Peer Knowledge Exchange with The NeuGroup Network. The NeuGroup Network has over 330 members in 16 distinct peer groups for treasurers, heads of internal audit and enterprise risk management and their senior reports.

To learn more about becoming a member, contact us here.

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Blog entry
By mkmoore, March 27, 2014

The AT30 will discuss developing treasury staff and the path to the treasurer’s office at their meeting.

The Assistant Treasurers’ Group of Thirty (AT30), now in its third year, will meet on May 6-7 in Princeton, NJ, at the offices of Bristol-Myers Squibb. Sponsoring the event will be HSBC, a long-time NeuGroup partner.

The group has developed an agenda that focuses on advancing treasury’s skill set, career path and perceptions by other departments. Developing the treasury staff is a goal for any responsible leader. That task can be a challenge when the team members are a mix of devoted treasury practitioners and the generalists dropping in for a year or so to check off the treasury box on their way up a broader career path.  AT30 members will discuss and share their approaches to staff development.

But for dedicated treasury professionals, the eye is on the ultimate prize of the treasurer title. A meeting session will address the “path to the treasurer’s office,” as described by featured guest speakers, the treasurers at General Motors and Honeywell.  These speakers will tell the story of their own careers, what they would expect in a successor, and advise members on how they should prepare for that opportunity when it comes, in addition to fielding questions from members.

Aside from the staff and the AT, many also see value in training other groups about the role and value of the treasury department and have developed programs specifically for that task. A meeting session will feature one or two members who will share their program and the benefits they derive from it.

Currently, the AT30 has reached its membership capacity, therefore The NeuGroup is looking to start a second group for assistant treasurers. If you would like more information about this initiative, please click here to contact Bryan Richardson, Senior Director of Peer Knowledge Exchange, and the leader for the AT30 and AT30-2.

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, March 27, 2014

The NeuGroup for treasurers of US regional banks will be meeting for its tenth annual meeting on May 14-16 in New York. Topping this year’s agenda again will be an update on bank regulation impacting US banks and the on-going lessons from stress-testing and capital plan submissions for larger regional banks and the downstream stress-tests and capital plan scrutiny for banks under $50B in total assets.

The Fed’s recent release of results from the Dodd-Frank Act Stress Test (DFAST) and latest Comprehensive Capital Analysis and Review (CCAR) make this a timely topic for all participants. And the ongoing rollout of interagency rules on liquidity (e.g., the Liquidity Coverage Ratio) as well as capital and the Volcker Rule make this meeting a valuable opportunity to share notes on interpretation and impact of new guidance with peer practitioners and leading experts.  

Morgan Stanley will be sponsoring the meeting this year. David Russo, Morgan Stanley's treasurer, will kick-off discussion with member treasurers of the organizational, staffing, compliance and governance infrastructure changes that CCAR banks have been making to cope with stress-testing and related governance frameworks required by prudential regulators. Participants will also address the systems, models and data lessons from the stress-tests and interaction with regulators.

The NeuGroup and the Bank Treasurers’ Peer Group members look forward to working with Morgan Stanley to continue the successful 10-year track record of this annual event.

The Bank Treasurers’ Peer Group (BTPG) was founded in 2005 to provide a select group of US regional bank treasurers with the opportunity to share experiences, benchmark common practices and seek solutions to shared challenges. The BTPG is one of 16 groups in The NeuGroup Network.

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Blog entry
By mkmoore, March 24, 2014

Increases in US interest rates are all but certain, with the debate being one of timing and size. A number of financial experts feel the actual pace and magnitude of these rate increases may not be as aggressive as the current forward rate curve implies, leaving treasurers to decide is it better to issue fixed debt and swap to floating, stay fixed, or stay floating?

The Treasurers’ Group of Thirty (T30) will discuss this topic in a roundtable session at their upcoming April meeting. The meeting is hosted and sponsored by Standard Chartered Bank in New York.

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 mkmoore, March 19, 2014

New name. New logo. Same "Intelligence for Treasurers."

This month we celebrate the 20th anniversary of International Treasurer. To mark the occasion, we have updated the name and logo to “ iTreasurer” to align with modern times and to be ready for the next 20 years of intelligence for treasurers.

Click here to read Founder and President Joseph Neu’s thoughts on the evolution of iTreasurer and the role of treasury.

In 1994, Joseph saw the need for a publication that focuses on the unique informational and practical application needs of treasurers. One thing stays the same, our original mission statement, published in the very first issue, is still our guiding principle 20 years later:

International Treasurer’s mission is to provide you with the information and analysis you need to succeed at one of today’s most demanding corporate functions: international treasury.

The role of treasury has continued to expand with corporations globally, across business functions, into new risk categories and beyond core treasury responsibilities. The original mission statement has guided the development of additional resources for treasurers, including short courses, roundtables, websites, and special surveys and reports.

Ultimately, this evolution culminated in the formation of The NeuGroup Network, with 16 peer groups and more than 330 members. Today, as iTreasurer, we emphasize the same type of intelligence we have provided treasurers for 20 years and that we will continue to provide into the future.

Click here for a timeline of the events and coverage that have shaped treasury for the past 20 years.

iTreasurer is the publishing and information outlet for The NeuGroup. For 20 years treasury professionals have relied on iTreasurer’s perspective on what’s important to treasury. It is the only treasury publication that draws on the expertise of leading treasury practitioners who are members of The NeuGroup Network. These in-depth interactions with leading treasury professionals are the basis for articles, news and case studies that are specifically meaningful to treasury best practice. www.iTreasurer.com

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