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Risk Management

Accounting & DisclosureCapital MarketsFXRisk Management
May 7, 2020

Crisis Forces Consideration of Unwinding Cash-Flow Hedges

The COVID-19 crisis has reduced exposures to a point where for many companies those hedges may not be needed anymore. Time to unwind? If you’re planning on unwinding a cash-flow hedge, there are many things to think about before you do. Determining when and why to unwind, as well as how to view the transaction’s cost benefits, and what counterparty to use, are just a few of the factors to consider. This was the topic of discussion among NeuGroup FX Managers’…
Ted Howard
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Cyber riskRisk ManagementTreasury Management
May 7, 2020

Cyberattacks: Post-Pandemic May Be Worse Than the Lockdown

Best practices pre-pandemic have become even more important as the economy reopens. A top treasury concern for years, cyberattacks ramped up following the sudden transition to the work-from-home regimen prompted by the pandemic. They’ll likely ramp up even further when the economy begins opening up.  That was among the takeaways from a session on cybersecurity at a recent virtual NeuGroup meeting headed by Jenny Menna, deputy chief information security officer at U.S. Bank, and Chris Moschovitis, CEO of technology consultancy tmg-emedia.…
Ted Howard
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COVID-19Risk Management
May 5, 2020

Aligning on the Meaning of Risk Helps Companies Focus on It

The word risk means different things to different people; how can you agree on the definition across an organization? “What exactly does risk mean to you?” one member asked during a recent virtual meeting of NeuGroup’s Corporate Enterprise Risk Management Group. The question was a bit rhetorical—the member answered it himself by saying risk means different things to different people. There is good risk, bad risk, strategic risk, operational risk and catastrophic risk. This was true, said one member of…
Antony Michels
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Capital MarketsInvestment ManagementRisk Management
April 21, 2020

Seizing Opportunities, Waiting for More and Getting Back to Work

Quick Takes, COVID-19 edition: A roundup of news, notes and notions from the NeuGroup Network. Strategic Acquistions: Waiting for Small Biotechs to Adjust to Lower ValuesHere’s some post-meeting follow-up from a treasurer in the biotech industry on his expectations for a “resetting of asset prices” and opportunities for strategic acquisitions as markets gyrate. “I would characterize it as an emerging opportunity. So far, you have had price adjustments (lower stock prices) for smaller biotechs. But you need two parties to…
Antony Michels
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FXRisk Management
April 14, 2020

As Day Follows Night: China Exposures Grow and So Do the Hedges Against Them

Members whose companies have material exposure to the Chinese market exchange experiences with how to manage the currency risk. What’s the best course of action when corporates need to blunt their growing cash-flow exposures in China? The answer, hedge. But what’s the best approach? Depends on the company of course. At a recent FX summit of NeuGroup’s two FX Managers’ Peer Groups – which due to COVID-19 was NeuGroup’s first-ever virtual peer group meeting – one session dealt with managing…
Ted Howard
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COVID-19Risk Management
April 14, 2020

“Too Soon” Is Now “Let’s Do It”: Risk Managers Start Planning for Life Beyond COVID

Up until about a week ago, companies were so busy handling the immediate issues related to COVID-19, they were putting off thinking of future risks. Enterprise risk management professionals are paid to look into the future and help companies prepare for it. But COVID-19 changed all that. “Too soon,” was the answer from most members of NeuGroup’s ERM peer group two weeks ago when we asked them about post-pandemic planning and their thoughts about the future. One member back then…
Ted Howard
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COVID-19FunctionalRisk ManagementSenior Executive
April 2, 2020

Closing a Quarter for SOX Can be Difficult in New, Remote World

An internal auditor describes what his company has done to successfully close a quarter when some physical tasks can’t be done. Part of Sarbanes-Oxley, the internal controls act released in 2002, requires a corporate’s chief executive and financial officers to certify financial and other information contained in the issuer’s quarterly and annual reports. But what happens in a crisis? What if some of that info requires someone in place to record inventory or in-person meetings when employee movement is heavily…
Ted Howard
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Capital MarketsRisk Management
March 31, 2020

Lock It Up: What You Need to Know About Pre-Issuance Hedging

The pros and cons of treasury locks and forward-starting swaps as bond issuance jumps. The crush of investment-grade issuers rushing to sell bonds as COVID-19 wreaks economic havoc has made pre-issuance hedging a relatively hot topic for many treasury teams. Chatham Financial, sponsor of NeuGroup’s Virtual FX Summit, helped members get a firmer grip on the various ways to manage interest rate risk—and the associated accounting implications—during the summit and a subsequent Zoom meeting. Here are some of the key…
Antony Michels
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COVID-19FXRisk Management
March 12, 2020

FX Hedging Opportunities Amid Virus Volatility

Opportunistic FX managers are locking in favorable exchange rates to hedge exposures as markets gyrate. NeuGroup members have locked in favorable foreign exchange rates in the wake of volatility sparked by the coronavirus outbreak, plunging oil prices and speculation about more US interest rate cuts by the Federal Reserve. “We’re taking advantage; this is something of an opportunity to layer in hedges,” said one risk manager during a NeuGroup’s Virtual FX Summit sponsored by Chatham Financial. Amol Dhargalkar, a managing…
Antony Michels
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COVID-19Risk Management
March 6, 2020

Internal Auditors Snapping into Action to Help Companies Cope with Coronavirus Crisis

The outbreak points up the need to create or improve pandemic policies and formalize rules. The coronavirus outbreak is revealing how prepared multinational corporations are for threats posed by crises that can affect almost every area of a business. And that’s made the virus a top concern and focus of many members of NeuGroup’s Internal Auditors’ Peer Group (IAPG) who are playing a key role in the response. Proactive approach. “I am now devoting more than 50% of my time…
Antony Michels
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