By Anne Friberg
A new take on familiar themes at EuroFinance’s annual confab in Miami.
EuroFinance’s conference on International Cash and Treasury Management took place in Miami as usual last month. The key themes zeroed in on revisiting treasury strategies as well as the bank and vendor partners you rely on and then innovating and delivering value to the organization.
Strategy: Treasury Talent and Centers of Excellence. A session on treasury transformation by treasury director Jan-Martin Nufer of Borealis—an Austrian petrochemicals company—kicked off the strategy revisit theme. The company has in recent years undertaken a complete overhaul of the treasury function with a focus on a centralized and integrated (but multi-location) organization, systems and STP, holistic risk management, strategic funding, process mapping and governance. Borealis has particularly focused on the people side and Mr. Nufer highlighted how the company assesses performance and manages careers. Based on a finance competence matrix, talent is identified and offered development toward people or business management roles in a structured and thought-out manner that challenges and retains people.
Mr. Nufer’s centralization imperative was reiterated in the following panel by Jim Colby, assistant treasurer of Honeywell; the company recentralized all FX hedging to HQ because all the surrounding regulatory accounting and compliance required a “center of excellence” approach. Mr. Colby said the same CoE approach serves treasury areas like bank relationships, finance and capital structure, investment policy and credit limits globally as well.
Revisit Your Partners: The Banks and Their Vendors. The traditional bank panel discussion anchored the second theme of the conference, with cash management heads Michael Cummins of HSBC, “Dub” Newman of Bank of America Merrill Lynch and Antoine Arts of Santander. The key takeaway was that banks cannot do everything and they choose whether to “buy or build” some of the services in their offerings, Mr. Newman noted. When banks use outside vendors, “we need to disclose that to clients,” Mr. Cummins said.
Mr. Arts remarked: “We hardly ever get questions about our vendors; it’s assumed we are conservative.” On the other hand, clients do ask: “How will you work with our vendors?” Corporates seem unconcerned about the former but not the latter. Shouldn’t they pay attention to both? Oh, and by the way: those RFP templates many companies use in their cash management RFPs are at least a couple of years old and many questions are outdated and no longer apply.
Deliver Value in Tax and Compliance. Compliance and tax may be dirty words in treasury, but a pair of discussions on the last day highlighted their importance. John Forry of the San Diego Law School recommended treasury coordinate more with tax and accounting because more scrutiny is coming if the global corporate structure appears to be tax-driven. Sam Peterson and Rob Royall of Ernst & Young tag-teamed on derivatives regs and said treasury folks don’t do enough to “document, show off and memorialize your compliance efforts” as something valuable and not just a must-do waste of time.