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Role of Treasurer Duties
- 1. The Role of Treasurer Clarine Usher, CTP clarineusher@gmail.com 781-801-9133 TMANE Conference 7 May 2009
- 2. Presented by C Usher 7 May 2009 2 Just Imagine! We are going on a Journey • Road Map • Tools • GPS
- 3. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 4 The Role of Treasurer “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. Presented by C Usher 7 May 2009 5 Roles and Responsibilities • Cash Management • Capital Markets • Risk Management • Compliance and Internal Controls • Corporate Governance • Technology
- 6. Presented by C Usher 7 May 2009 6 Roles and Responsibilities • Cash Management – Collection/ Concentration – Disbursements – Short-Term Investing – Banking Relationships – Cash Forecasting • Quality, reliability and accuracy
- 7. Presented by C Usher 7 May 2009 7 Roles and Responsibilities • Capital Markets – Cash flow needs > one year – Financial Instruments • Debt (Bonds/Notes) and Equity – External Financing • Borrowing • Leasing
- 8. Presented by C Usher 7 May 2009 8 Roles and Responsibilities • 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. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 10 Roles and Responsibilities • 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. Presented by C Usher 7 May 2009 11 Roles and Responsibilities • Technology – Enterprise systems – Treasury workstations – Banking institution cash management systems – Excel spreadsheets – Security • Restricted access • Password protected
- 12. Presented by C Usher 7 May 2009 12 Three Drivers • Globalization • Technology • Regulatory
- 13. Presented by C Usher 7 May 2009 13 Three Drivers • Globalization –Outsourcing –Taxation –International Coordination –Economic Growth –Systemic Failure –Access to Capital
- 14. Presented by C Usher 7 May 2009 14 Three Drivers • Technology –Decade of the 90’s –Straight flow through processing –Cell Phone • Information –Integrity –Security
- 15. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 16 Three Drivers • Regulatory – 2002 - Sarbanes-Oxley Act – 2007 – FAS – 157 –Fair Value Measurements – 2009 – EITF – 99-20-b- OTTI
- 17. Presented by C Usher 7 May 2009 17 Treasury Centralized vs Decentralized • Economies of Scale • Technological efficiencies • Operational efficiencies • Aggregation of positions • Effective deployment of resources
- 18. Presented by C Usher 7 May 2009 18 Key Processes • Benchmarking – KPIs • Consolidations and Eliminations – M &A – Divestitures
- 19. Presented by C Usher 7 May 2009 19 Key Processes • Implementation and Integration – Systems – Processes – Controls • Transformation – Change agent
- 20. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 23 On the Road Again • IFRS • Taxation • Nationalization • Frauds and scams • Globalization • Economy • Technology
- 24. Presented by C Usher 7 May 2009 24 The Role of Treasurer Taking it to the “Next Level”
- 25. Presented by C Usher 7 May 2009 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. Presented by C Usher 7 May 2009 26 The Role of Treasurer Q & A
- 27. The Role of Treasurer Clarine Usher, CTP cusher@earthlink.net 781-801-9133