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Risk management remains top of mind for corporate treasurers, and the question of how to be more strategically involved in business decision-making is the crux of the problem.
Risk management was one of the top issues discussed and debated at
the AFP conference this year - and it continues to be something that is
top of mind for corporates treasurers. In an Executive Institute
session, alongside Jiro Okochi, chief executive officer (CEO) and
co-founder of Reval, Mario Cornacchio, Jr, treasurer of Bose, went
through steps in the evolution towards strategic risk management.
Cornacchio explained how the environment of “inconceivable” volatility and rate of change has given the treasury an opportunity to lead. Bose treasury took a pragmatic approach to risk management, and overcame the problems of needing new skills in the treasury as well as resource constraints. But, he said, the big question to answer was: are we as treasurers ready to lead?
Bose doesn’t have an enterprise-wide risk management system but is working towards partnering with other areas to assess and quantify risk, in order to consciously choose what risk it is willing to take. Cornacchio believes that it is not about being risk averse, but managing risk. He made the point that treasurers need to talk at a strategic level without letting technical jargon get in the way - but that no one should underestimate the challenge in speaking in a different way to the board.
Bose uses Six-sigma and ‘lean’ enterprise methodologies to become more efficient and to use technology better. Some examples of how they improved risk management are:
Zicchino explored the idea of ‘personal branding’ and outlined six principles of marketing which can applied to self-promotion:
The solution’s aim was to remove paper from treasury and accounts receivable (A/R). The treasury and A/R teams joined forces to meet the following objectives:
Although it took a few weekends to complete the awards entries, the extra work was worth it, according to Stokes. She was invited to fly up on the corporate jet to Sibos in Toronto to pick up the gtnews award - and sat beside the chief financial officer (CFO). As a result, the CFO turned the project into the sustainability office as the finance department’s contribution to the corporate sustainability goals and the project was then publicised on the company’s intranet. Stokes has submitted the project to her university alumni class notes to gain visibility with her peer group.
Zicchino made the point that even if Kellogg had not won an award, Stokes and her team could have promoted the project by writing a bylined article or case study for a trade publication.
gtnews has just announced the 2012 Awards for Global Corporate Treasury - are you planning your entry?
First published on www.gtnews.com
Cornacchio explained how the environment of “inconceivable” volatility and rate of change has given the treasury an opportunity to lead. Bose treasury took a pragmatic approach to risk management, and overcame the problems of needing new skills in the treasury as well as resource constraints. But, he said, the big question to answer was: are we as treasurers ready to lead?
Bose doesn’t have an enterprise-wide risk management system but is working towards partnering with other areas to assess and quantify risk, in order to consciously choose what risk it is willing to take. Cornacchio believes that it is not about being risk averse, but managing risk. He made the point that treasurers need to talk at a strategic level without letting technical jargon get in the way - but that no one should underestimate the challenge in speaking in a different way to the board.
Bose uses Six-sigma and ‘lean’ enterprise methodologies to become more efficient and to use technology better. Some examples of how they improved risk management are:
- Innovative foreign exchange (FX) options hedging programme.
- More advanced customer default risk assessment.
- Hands on support in supplier risk assessment.
- China supply concentration and renminbi (RMB) hedge.
- Opportunistic Mexican peso hedge.
- Data breach response plan.
Treasury: How to Increase Your Profile
Cornacchio’s question raises the issue of how to get a seat at the table when it comes to more strategic questions. Eileen Zicchino, chief marketing officer (CMO), JP Morgan Treasury Services, and Deirdre Stokes, certified treasury professional (CTP), manager, corporate treasury, Kellogg Company, ran a session entitled ‘What Have You Done For Me Lately? Marketing Your Professional Assets’, which got to the crux of how to raise your profile within the organisation.Zicchino explored the idea of ‘personal branding’ and outlined six principles of marketing which can applied to self-promotion:
- Know your audience.
- Tailor the message to your audience, whether that is your team, manager, board or external parties.
- There are only two stories worth telling: efficiency gains and creating value.
- Now you have the story, aggregate the facts, i.e. milestones in the project.
- Leverage the right tools, i.e. company newsletter, intranet, bylined articles for external publications, conference presentations, case studies and awards submissions.
- Get help from experts, i.e. marketing department, internal communications, banks and vendors.
The solution’s aim was to remove paper from treasury and accounts receivable (A/R). The treasury and A/R teams joined forces to meet the following objectives:
- Eliminate many common manual processes.
- Improve the timeliness of the bank account reconciliation process.
- Reduce the use of paper, which in turn impacts energy use and waste generation.
Although it took a few weekends to complete the awards entries, the extra work was worth it, according to Stokes. She was invited to fly up on the corporate jet to Sibos in Toronto to pick up the gtnews award - and sat beside the chief financial officer (CFO). As a result, the CFO turned the project into the sustainability office as the finance department’s contribution to the corporate sustainability goals and the project was then publicised on the company’s intranet. Stokes has submitted the project to her university alumni class notes to gain visibility with her peer group.
Zicchino made the point that even if Kellogg had not won an award, Stokes and her team could have promoted the project by writing a bylined article or case study for a trade publication.
gtnews has just announced the 2012 Awards for Global Corporate Treasury - are you planning your entry?
First published on www.gtnews.com
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