What’s on International Treasurers’ radar this week.
A number of developing issues were mentioned in this week’s editorial meeting, including how a US default would have an impact on corporate debt as well as questions surrounding corporate governance and risk and how managers are paid.
Debt ceiling debate
The wrangling over the debt ceiling is reaching a boiling point as the deadline to raising the cap approaches. And just in case one thought things couldn’t get hotter, enter the rating agencies warning congressional leaders that the US risks losing its Triple A rating if the debt ceiling is not raised. The US Treasury says the ceiling must be raised by Aug. 2 or they will run out of cash to pay the government’s bills. If that does happen, what happens to the corporate debt market? Certainly it would be hamper companies’ ability to obtain financing. But what other impacts would there be from a corporate perspective?
Risk governance
Recent newspaper reports say risk officers at financial institutions are very highly compensated – some earning well into the millions and also now reporting direction to the CEO (see related story here). Will this “high compensation” trend begin to trickle down to risk managers at corporations? After all, the financial stakes can be just as high for corporate risk managers as they are at banks. Further still, many corporations were already on top of the risk equation well before banks or the SEC, which now requires some sort of risk profile from companies, i.e., whether the company has a risk program, the relationship of a company’s compensation policies and practices to risk management and the like.
If money does suddenly come flooding into the treasury and/or risk function at a company, there certainly wouldn’t be any issues regarding talent management.