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Risk Management

Libor SOFRRisk Management
December 1, 2020

What an Extended Libor Deadline May Mean for Corporates

Takeaways on a proposal backed by the Fed that would allow more legacy Libor contracts to mature. Libor relief? Monday brought news that US regulators welcome a proposal by Libor’s administrator to offer an additional 18 months—until June 30, 2023—for legacy contracts to mature before Libor fully winds down. Reuters called the plan a “stay of execution.” What it means for corporates. We reached out to Amanda Breslin, managing director of treasury advisory at Chatham Financial, to get the significance of…
Justin Jones
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COVID-19Risk ManagementTreasury Management
December 1, 2020

Unearthing the Risks—from Printers to Stress—of Working from Home

Internal auditors discuss WFH challenges including data security and the mental health of employees.Internal auditors are trying to keep on top of myriad risks brought about by millions of employees at thousands of companies working from home as a result of the pandemic. At a recent NeuGroup meeting, two of the risks discussed demonstrated the wide spectrum of issues companies face, ranging from the somewhat mundane (printers) to the very personal (mental health). Risky printers. One member said her company…
Justin Jones
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COVID-19Risk Management
November 24, 2020

Rightsizing and Reshaping: What Post-Covid Corporates May Look Like

Internal auditors assess risks as companies shift where and how employees work. Members of NeuGroup’s Internal Auditors’ Peer Group (IAPG) agreed that the pandemic will quite literally reshape the physical look of companies—mostly large technology firms—as well as introduce a host of new risk concerns that are just starting to be considered. Companies’ real estate is bound to shrink as they consider how and when to support the significant number of fully remote and hybrid employees—those coming to office less frequently—that…
Justin Jones
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Pension and BenefitsRisk Management
November 24, 2020

Pension Puzzle: Insights for Managers Putting the Pieces Together

Willis Towers Watson weighs in on WACC, the efficient frontier and pension financing alternatives.Pension fund managers evaluating alternative funding strategies should not necessarily use their companies’ weighted average cost of capital (WAAC) as a discount rate; the risks of the pension should be viewed differently than a normal project investment considered by the company. That was among the key takeaways from a recent NeuGroup Virtual Interactive Session sponsored by Willis Towers Watson, “Relative Value: Pension De-risking in a Post-Covid World.”…
Justin Jones
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ComplianceRisk Management
November 19, 2020

Right on Target: Tracking Companies’ Changing Risks

One member’s “risk radar” facilitates explaining evolving risks to audit committees. Corporate risk is no easy concept to convey, especially when risks are numerous and shifting in intensity over time. Equally challenging is explaining a risk’s evolving urgency to board members, who must concurrently digest reams of information. Responding to a query about how peers justify urgent audit-plan changes to audit committees, a member of NeuGroup’s Internal Auditors’ Peer Group described the “risk radar” he presents quarterly to illustrate dynamically the…
Justin Jones
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BankingLibor SOFRRisk Management
November 12, 2020

Mismatched Hedge Risk: Derivative Values May Change as Libor Ends

Standard Chartered, helping corporates prepare for risk-free rates, describes the potential risk of “valuation jump.”The replacement of Libor by risk-free rates (RFRs) like the secured overnight financing rate (SOFR) in the US and the sterling overnight indexed average (SONIA) in the UK has been a hot topic at NeuGroup fall meetings where banks, regulators and other experts have been helping members prepare for Libor’s planned demise at the end of 2021. At a second-half meeting of the Asia Treasurers’ Peer…
Justin Jones
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Investment ManagementRisk ManagementTechnology
November 5, 2020

Data-Driven Decisions Aided by Dashboards and Scorecards

A NeuGroup member describes his money market fund dashboard and investment manager scorecards.Dynamic dashboards that help corporates leverage data to make better decisions are becoming essential tools for finance teams committed to tapping technology to transform. Some companies in the NeuGroup Network are generating envy by using in-house tech talent skilled in programs such as Python to create dashboards, while other members are turning to Power BI or Tableau to ramp up.But a recent meeting of treasury investment managers underscored that…
Justin Jones
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Cash & Working CapitalCOVID-19Risk Management
November 5, 2020

Policies Resembling Guardrails That Withstand Trigger Events

Key takeaways from the Assistant Treasurers’ Leadership Group 2020 H2 meeting, sponsored by Chatham Financial.By Joseph NeuPolicy and procedures off the back burner.  The pandemic put a wide range of policy and procedure review projects on the back burner and more members are starting to refocus on them now as immediate liquidity concerns recede. A session on risk policy reviews, for instance, highlighted how valuable a review can be after an event trigger from a change in business, such as…
Justin Jones
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Investment ManagementPension and BenefitsRisk Management
November 3, 2020

Walk Before You Run: Using Derivatives in Pension Funds

The value of educating stakeholders on why using derivatives can make sense.During a recent NeuGroup for Pension and Benefits session sponsored by Insight Investment and BNY Mellon, a pair of members shared their knowledge and experience using derivatives in managing corporate pension plans. Two highlights: “Walk before you run” emerged as a key piece of advice to members, most of whom do not make extensive use of derivatives.Educating stakeholders including finance committees, C-Suite executives and accountants on derivatives and their…
Justin Jones
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BankingRegionalRisk Management
November 3, 2020

Preparing for More China-US Tension, New Current Account Rules in India

Key takeaways from the Asia Treasurers’ Peer Group fall meetings sponsored by Standard Chartered.By Joseph NeuIndia ties current accounts closer to credit relationships. Members wanted clarity on a Reserve Bank of India (RBI) circular released over the summer that seeks to restrict current accounts to banks with which companies have a local credit relationship—subject to thresholds. Standard Chartered’s presentation explained that going forward, banks cannot open a current account for a customer who has “availed” a cash credit or overdraft…
Justin Jones
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