Capital AllocationCapital Markets
January 28, 2020

Share Repurchases: Don’t Wait for the Sell-off

The case for spending all (or almost all) the cash allocated to buybacks right away. Monday’s stock market sell-off provides an opportunity to revist an insight on stock buybacks from a NeuGroup meeting last spring: A risk management expert at Deutsche Bank argued that waiting for dips is not the most effective way to repurchase shares. That’s worth considering given that many companies only buy back their stock when the price dips below what they consider its intrinsic value. Danger…
Capital MarketsESGRisk ManagementSenior ExecutiveUncategorized
January 28, 2020

Activist Investors Who Care About More Than One Kind of Green

Founder’s Edition, by Joseph Neu Takeaways from a fireside chat with ValueAct founder Jeffrey Ubben. Based on a head’s up from a top Wall Street activist defense adviser, I went to an event earlier this month hosted by Refinitiv and Reuters Breakingviews that featured a fireside chat with ValueAct co-founder Jeffrey Ubben. Mr. Ubben has stopped trying to increase his net worth and is now focused on making the world a better place (at least according to his worldview). One…
Uncategorized
January 16, 2020

AI Makes Cash Forecasting Less Art, More Science

HighRadius says AI continually improves cash-flow forecasts. Artificial intelligence (AI) may “take the art” out of cash forecasting while perpetually improving forecasts, but there will still be plenty of work for treasury staff. That was the message imparted by Tracey Ferguson Knight, director of solution engineering for treasury at HighRadius, which hosted a recent NeuGroup meeting. She noted that cash forecasting today can be hobbled by inefficient technology—think Excel spreadsheets—and difficulty gathering and leveraging the correct data sets, an art…
RegionalSenior ExecutiveTreasury Management
January 16, 2020

A High Bar: Lowering Corporate Expectations and Under-delivering Successfully

Slower economic growth and tighter consumer credit put pressure on finance chiefs in Asia. The subdued mood among participants at a recent NeuGroup meeting of CFOs in Asia reflected the difficulty many members say they are facing as China’s economic growth slows and business conditions worsen, while expectations for revenue growth at corporate headquarters remain unrealistically high. Managing expectations. The key challenge, then, for some members is managing the expectations of those in the C-Suite who still want 10% revenue…
ComplianceRegionalSenior ExecutiveTax
January 15, 2020

What China’s Individual Income Tax Changes Mean for Corporates, Expats

CFOs with employees in the country need to plan for new residency rules and ensure compliance. The most significant reform of China’s individual income tax (IIT) laws in 38 years has numerous implications for foreign workers and the multinational corporations that employ them. Michelle Zhou, a partner at KPMG, presented many of the critical elements of the changes to a group of CFOs at a recent NeuGroup meeting in Shanghai. Big picture. CFOs—who are responsible for income reporting—need to proactively…
ComplianceRegionalSenior ExecutiveTaxUncategorized
January 15, 2020

China’s Corporate Social Credit System: What Corporates Need to Know and Do Now

The implications and challenges for corporates facing a new world of ratings. Full implementation of China’s corporate social credit system (SCS) is slated for the end of 2020—a reality with huge implications for multinationals doing business in the country. And that means more work for many CFOs and finance teams. CFOs are often in charge of coordinating the final reporting of data provided by multiple areas of the company and ensuring there is no conflicting information. They’re also responsible for…
Capital MarketsTreasury Management
January 14, 2020

Love It or Hate It, ESG Is a Key Theme for 2020

Founder’s Edition, by Joseph Neu Reasons you can’t afford to leave ESG off your priority list. ESG and related themes of sustainability and green finance are polarizing. Nearly everyone sits on a spectrum where one end thinks it’s all a bunch of hooey and the other argues it’s the key driver of finance for the next decade. Personally, I feel conflicted—one reason ESG didn’t make my initial list of key 2020 issues. Mixed feelings aside, I’m convinced the decade ahead…
InsuranceTreasury ManagementUncategorized
January 9, 2020

Rising Insurance Premiums Inflict Pain, Require Pushback

D&O prices spike as insurers respond to a surge in claims following a Supreme Court decision. Rising insurance premiums had treasurers and assistant treasurers at a recent NeuGroup meeting using plenty of colorful language to describe the current market for coverage and the pain some carriers have caused with their initial pricing proposals. Among the tamer comments, one member said the directors and officers (D&O) market is the “ugliest in years” and that “a lot of frustration” erupted in her…
Capital AllocationCapital MarketsCash & Working Capital
January 9, 2020

The Art—Not Science—of Matching Capital Allocation to the Situation

Treasurers discuss balancing the need for liquidity with keeping cash levels moderate as business ebbs and flows. Decisions about capital allocation help treasury pave the way for the road ahead and may take on added importance for businesses generating lots of cash—as well as for those whose growth is downshifting. Treasurers at a recent NeuGroup meeting of life sciences companies shared approaches to the challenges of allocating capital during a variety of scenarios and situations. Optimal capital allocation amid uncertainty.…
Capital MarketsRisk Management
November 29, 2019

Concerns About the Transition from Libor to SOFR

(Editor’s Note–published November 29, 2019) Treasurers aren’t too happy about the fallback language for the Libor-to-SOFR switch. Members at a recent NeuGroup meeting used some colorful language in discussing the challenging issue of changing fallback language in contracts that currently use Libor, the benchmark rate that’s scheduled to disappear after 2021. The wording needs to specify what rate will replace Libor when it’s gone, what triggers the switch, and the pricing spread adjustment between Libor and the successor rate to…