Annual Review and Financial Summary Statements 2002 / 2003

ONCE AGAIN THIS has been a year of significant change for the ACT with a new Chief Executive, a new President and a new governance structure coming fully into play for the first time. It has also been a testing time financially. As Anthony Stern predicted in his President’s Statement a year ago, this year’s deficit at £108k was larger than last year.This is not however altogether surprising. At the time of the introduction of the new governance arrangements we also took some significant decisions to invest for the ACT’s future.We decided to strengthen our executive team,
one outward sign of which was the the change from a part-time Director General to a full-time Chief Executive, and are actively working to develop our programme of qualifications as well as launching our new Training Programme. Such developments demand serious levels of investment but we believe that they are essential if we are to maintain a dynamic and vibrant organisation suited to the needs of today’s corporate treasurers.
Our financial position has not been helped by the fact that this period of investment has coincided with the continued economic slowdown, which has restricted income from advertising and sponsorship.We are fortunate that reserves have been built up in previous years which, with careful management, should enable us to weather the economic storm whilst continuing to invest in our future.

The work in education never ceases and it is of course at the very heart of the ACT. In this regard I must say that my favourite event of the year so far has been the Annual Conferment Ceremony. I had the pleasure of presenting successful examinees with certificates to mark their achievement and examination prizewinners were presented with their prizes, in front of an invited audience of colleagues, family and friends. The year has also been very demanding for the technical work of the ACT.The fall out from Enron in the form of Sarbanes-Oxley and the Higgs report will reverberate around British boardrooms for some time to come.The ACT made strong representations to the Higgs consultation process, many of which were reflected in the eventual outcome.The FRC’s final recommendations will undoubtedly have a significant impact on boardroom behaviour but
I cannot help but wonder where the non-executive directors of the future will come from.There must be a number of nonexecutives in UK PLCs who are thinking that the job they are now being asked to do is not the one they volunteered for only a few years ago.

The proposed adoption of International Accounting Standards with effect from 1 January 2005 has been a particularly important issue for treasurers, especially IAS 32 and 39. Few treasurers would argue against the disclosure of mark-to-market valuations of financial derivatives to ensure a fuller understanding of the financial risks but when accounting standards risk changing sensible commercial behaviour then I must confess to having some
concerns.The ACT’s Technical Committee has been very involved with the process in an attempt to improve certain aspects of IAS 39.We must wait to see if those efforts have been effective. We have also responded to government proposals in the pensions field, an area which seems ideally suited to the skills of corporate treasurers.This is undoubtedly a hot topic in business at the moment, and not necessarily for the best reasons, but sometimes it is only as a result of problems on this scale that the need for better risk management skills is more widely understood.
One event of the year which presents me with a more personal challenge is the Annual Dinner.We were delighted with last year’s
Dinner and I look forward to welcoming members and friends of the ACT this year, when Baron Alexandre Lamfalussy will be speaking.

Finally, running the ACT is a complex task, balancing the contributions of the executive team (and their staff) with that of our member volunteers.We are very fortunate in having built an extremely effective team in the ACT whose skills, enthusiasm and commitment more than make up for their limited numbers.Their efforts are very much appreciated. In addition we are also very dependent on those members who give of their time and expertise so willingly to ensure that the ACT continues to be the kind of Association they can feel proud to belong to.Their contribution,
whether through Council, committees or regional groups has been very much appreciated.This is especially important given the ever increasing demands placed on everybody in the current business environment, where more is continually demanded from less. I am extremely grateful for all that our staff and our volunteers have done.

We cannot predict the future, and indeed the world would be a much less interesting place if we could, but I can be sure that the speed of change will not ease and that there will be many new and different challenges to face in the years ahead. I also know that the ACT can look forward to meeting those challenges with confidence.

Philip Gillett
President