The Role of Treasurer

The Role of Treasurer

Clarine Usher, [email protected]

781-801-9133TMANE Conference

7 May 2009

Presented by C Usher 7 May 2009

2

Just Imagine! We are going on a Journey

• Road Map

• Tools

• GPS


3

“Treasurer”

“In their expanded roles, treasurers serve as valuable resources to their organizations providing insight from a point of view that was previously overlooked or underutilized”

Jim Kaitz, President and CEO of the Association for Financial Professionals


4


“Treasurers serve as financial risk managers that seek to protect a company’s value from the financial risks it faces from its business activities.”

“The Challenging Role of Corporate Treasurer” by Permjit Singh


5

Roles and Responsibilities

• Cash Management• Capital Markets• Risk Management• Compliance and Internal Controls• Corporate Governance • Technology


6


• Cash Management– Collection/ Concentration– Disbursements– Short-Term Investing– Banking Relationships– Cash Forecasting

• Quality, reliability and accuracy


7


• Capital Markets– Cash flow needs > one year– Financial Instruments

• Debt (Bonds/Notes) and Equity– External Financing

• Borrowing • Leasing


8


• Risk Management– Liquidity Risk– Credit Risk

• Lines of Credit– Currency Risk

• Transaction and Translation cost– Interest Rate Risk

• Volatility in the marketplace– Operational Risk


9

Roles and Responsibilities• Compliance and Internal Controls

– Regulatory• SOX 404• Global, Country, state• FASB, NAIC, SEC, OCC

– Accounting Policies• GAAP, STAT, IFRS

– Company - Statement of Investment Policy• Liquidity Policy• OTTI Policy

– Policies and Procedures• Reviewed at least annually


10


• Corporate Governance– Board of Directors

• Composition of Outside Directors & Senior Management• Audit Committee

– Senior Management• Organizational culture• Transparency/ Opaqueness

– Cultural differences• US Foreign Corrupt Practices Act (FCPA)

– Fraud and bribes


11


• Technology – Enterprise systems– Treasury workstations– Banking institution cash management systems– Excel spreadsheets– Security

• Restricted access• Password protected


12

Three Drivers

• Globalization

• Technology

• Regulatory


13

Three Drivers

• Globalization– Outsourcing– Taxation– International Coordination– Economic Growth– Systemic Failure – Access to Capital


14

Three Drivers

• Technology– Decade of the 90’s– Straight flow through processing– Cell Phone

• Information– Integrity– Security


15

Three Drivers

• Regulatory– 1933 – Glass Steagall Act – 1994 - FAS -115 – Mark to Market

• Established 3 investment categories– Held to Maturity– Trading– Available –for-sale

• Moved from buy and hold to active trading – 1999 – Repeal of the Glass Steagall Act

= Gramm-Leach-Bliley Act


16

Three Drivers

• Regulatory

– 2002 - Sarbanes-Oxley Act– 2007 – FAS – 157 –Fair Value Measurements– 2009 – EITF – 99-20-b- OTTI


17

Treasury Centralized vs Decentralized

• Economies of Scale• Technological efficiencies• Operational efficiencies • Aggregation of positions• Effective deployment of resources


18

Key Processes

• Benchmarking– KPIs

• Consolidations and Eliminations– M &A– Divestitures


19

Key Processes

• Implementation and Integration– Systems– Processes– Controls

• Transformation– Change agent


20

Additional Tools

• Business Continuity Planning– Thorough documentation– Defined roles and responsibilities– Include revisions of processes, contact

numbers, key personnel– Mock test semi-annually – Post analysis and revisions


21

Additional Tools

• Inter-Company Netting Agreements– Ensure that all company agreements conform

to specific country regulations – Consistent application of uniformity within the

contents of these agreements• Segregation of Duties• Authorization Policy• Rating Agency Relationships


22

How has lenders’ quality of service changed since the crisis began?

Worse No Chg Better

Cost of borrowing 59% 36% 5%

Ability to make lending decisions & commitments

58% 41% 1%

Flexibility of Lenders 58% 39% 4%

Amt of doc req to secure funding

47% 52% 1%

Range of svcs/ products available

39% 59% 3%

Availability of suitable staff at lenders

18% 77% 4%

*Numbers add up to more than 100%Source: CFO “All Eyes on Treasury” Jan 2009


23

On the Road Again

• IFRS • Taxation• Nationalization• Frauds and scams • Globalization• Economy• Technology


24


Taking it to the “Next Level”


25

Better Industry Practices

• Role of Treasurer should be integrated as a member of senior management

• Centralized Treasury• Integrated Treasury and IT systems• Compliance and strong Internal Controls• Updated written Policies and Procedures• Team effectiveness


26


Q & A


Clarine Usher, [email protected]

781-801-9133

mailto:[email protected]

The Role of Treasurer

Documents

Transcript of The Role of Treasurer