What’s on International Treasurer’s radar screen this week.
Several items emerged from International Treasurer’s weekly editorial meeting, including the continued interest from NeuGroup peer groups in treasury organization and, more specifically, talent management. Also, despite its still unclear impact, we’ll explore some of the “what ifs” of the European sovereign debt crisis. Also IT will look at the relationship between treasury and tax and some of the issues that can crop up in that can create strains.
Treasury and talent. The subject of treasury organization and talent management has become a feature topic at a number of NeuGroup peer group meetings throughout the summer and fall. The fact is, despite 9 percent unemployment, treasury remains a challenging area for keeping the best and brightest engaged. Some discussions of the talent include adopting the GE model of jettisoning the bottom performers (the 5 percent) and focusing on the rising stars. But there is a rub. Treasury does include a fair amount of grunt work; who’s going to do that if everyone thinks they’re a star? Another takeaway from recent meetings is treasury practitioners needing to market themselves; how do you keep yourself relevant and necessary? Marketing and selling yourself is the consensus.
Europe crisis impact.
The crisis in Europe has all the features of a slowly rising river. You know the flood’s coming, you know it’s going to be hell to deal with. But currently it’s an amorphous blob that is completely unpredictable. With such uncertainty, how can companies and their treasurers prepare? What risks should they be focusing on?
One of the puzzling features of the European crisis is that the euro still maintains its value, despite talk of normally euro-weakening possible outcomes: the Eurozone breaking up, a member leaving the union, or the ECB printing money to save the union. Also, what about US bank exposure to Europe? Fitch reported Wednesday that US banks are much more exposed to Europe than previously thought. For one, if the contagion reaches the more stable states like Germany and France, then US banks are utterly exposed. And even if they’ve limited that exposure, their business is likely to suffer: about one-third of big US banks’ capital market revenue comes from European counterparties, Fitch said.
Treasury and tax.
Another subject that was a recent topic at a NeuGroup peer group meeting was that of treasury and taxation. The question is, is tax’s constant quest for an efficient tax structure actually costing the company (particularly treasury) in time and effort to adhere to it? In other words, something that looks like it will save money now could end up negating that savings with the work that goes into executing it.
Remember Dodd-Frank? With the debt crisis and other news, Dodd-Frank seems to fallen off everyone’s radar. It seems the lack of clarity and delays has caused many to put Dodd-Frank matters on the back burner.