Taking the long view
Most of us are so caught up in the moment of the day that it is hard for us to lift our eyes from our PC or Blackberry to try to glimpse the horizon in an effort to put professional work and life in some sort of perspective.
Anyone with the tendency to be short-sighted can only admire Peter Hickson, Chairman of AWG, who in delivering the ACT Winter Paper 2007, sponsored by Barclays Capital, managed to give both a personal and a universal perspective of the key factors and forces that have driven the economy and business over the last three decades.
It is inevitable that treasurers, like everyone else, are caught up with fashions. If everyone is talking about private equity, share buybacks or takeovers by large foreign corporates, then it is hard and often futile to resist. And perhaps the point is not necessarily to resist these fashions; rather it is to possess the experience and wisdom to look beyond the latest trends and products to see what is in the longer-term interest of the shareholders.
That may not mean saying no, but it may involve trying to work out and then point out the downsides. But when a business is swept up with a particular corporate vision or vaulting ambition, it is not easy for treasurers to see where the elephant traps lie or where a sudden unexpected turn of events will hijack the whole scheme.
One of the dangers of the job of the treasurer is that it is possible to become caught up in the technical financial detail and forget that there are human actions and motives which play on the work of all treasurers. One of the roles of the treasurer is to keep a professional detachment and not be completely taken over by these motives. As Hickson reminded us, participation in a scene does not stop us from being intelligent observers of it.
The Winter Paper summed up the 1970s as a decade of high inflation and high interest rates, the late 1980s as a time of recession, the 1990s as the age of the dotcom boom, before – with hindsight at least – the seemingly inevitable dotcom bust.
The next question is simple to ask but harder to answer: what is the key theme that will emerge from the 2000s? In some ways the answer to that question can be left to financial historians. Whatever the events which shape corporate life and the work of the treasurer, there are some fundamentals which all treasurers should ensure that they and the organisations they work for hold amid the ebb and flow of corporate crises and disasters.
PETER WILLIAMS
Editor
After the interest rate increase from the Bank of England at the beginning of the year and speculation of further moves upwards, the price of European credit looks set to ratchet up in 2007, writes Julia Berris. Moody’s review of credit trends in 2006 the outlook for 2007 predicts an interesting year for the bond market, with tightening spreads in investmentgrade sectors.
Sensible pension scheme risk management does not necessarily mean selling equities and buying bonds. Rather it is about the trustees and sponsor agreeing an acceptable risk budget and then generating maximum returns within that budget.
Treasurers were rewarded for innovative and ground-breaking deals at The Treasurer’s Deals of the Year Awards 2006 lunch in London this year. High-flyers celebrated in style at Stationers’ Hall in central London, and were given framed articles about their deals in recognition of their efforts.
Three months into this year and 2006 already seems like a distant memory, fading out of view as we fast approach the spring. But for one treasurer 2006 is still very fresh and memories of transforming a well-established corporate division into a company in its own right feel all too recent.
For over 30 years, Peter Hickson has been a professional finance manager – or, as a headhunter once put it, an executive mercenary – dealing with a host of issues from the corporate coalface. In a highly entertaining, thought-provoking and provocative ACT Winter Paper, sponsored by Barclays Capital, Hickson shared his corporate experience to answer the question, optimum capital structure – fact or fiction?
In the third and final part of our series on securitisation, James Douglas and Simon Stephens of Deloitte look at the benefits and pitfalls of whole business securitisation.
HMRC published draft guidance late last year which could significantly change its policy on granting treaty clearances to allow interest to be paid gross in certain cross-border situations. This could give rise to an unwelcome additional tax cost of 20% of the interest, which may then be passed back to the borrower through gross-up clauses.
As the number of cases of corporate fraud rise, Julia Berris looks at the security issues facing treasurers.
Is it possible to manage a company’s short-term liquidity as a single, global daily position? At last, the answer can be yes, according to Phillip Lindow and Willem van Alphen.
With a large, diversified portfolio and a hands-on approach to investment, pension fund Oyak has deliberately set out toattract the attention of Turks and non-Turks alike. Does Oyak’s model of active ownership, diversified investments and joint ventures with well-known foreign companies offer a future model for pension funds across the globe?
Studying for a professional qualification is not an easy task at the best of times, especially when you also have a demanding full-time job to be getting on with. Making time for the work required to pass professional exams – study groups, extensive reading and lengthy revision sessions – is a daunting affair and it can often be hard to achieve the top grades.
But that is exactly what one student did when in the latest diet of the ACT’s exams she gained distinctions in all her MCT papers.
