Message from the Chief Executive - Well-being and resilience
Reflecting on the conversations I have had with treasurers recently - from companies both big and small - I’m reminded that it’s really important in times of change, uncertainty and challenge to take care of oneself and to make sure you’re looking after your well-being. In times of stress we often are so busy focusing on the immediate issues, prioritising fire-fighting and the urgent matters hitting our desks, that we tend not to think of attending to our wellbeing at all. It’s similar to how in business we often focus on the immediate at the expense of the longer term. But, just as making the time for strategic long-term thinking is a sign of a true leader, so is looking after our own well-being, whether it’s physical or mental health. This extends to our attitude towards self-development which often comes lower down the pecking order, with technical skills and competencies coming first. However this approach is self-limiting, and taking the time to develop competencies such as strategic influencing, communications and relationship-building skills is time well spent. As said though, we’re very good at focusing on the short term, and never getting to the long term - and that’s exactly the issue we can find here, as wellbeing is about a sustainable approach to life and work.
Nowadays in the business world, and in particular during this COVID-19 crisis, physical and mental wellbeing are talked about a lot. We’re certainly made very aware of the need to reflect on how well we are looking after ourselves and others, and how we’re coping with the added stresses brought about by the pandemic. However, how good we actually are at examining that, especially when it comes to ourselves, is questionable. It strikes me that most people I talk to worry about the strain and stress others are under, and are trying to help them where they can, but conversations around how they themselves are feeling and coping are far less frequent. We still see ourselves as having to put on a brave face, show we’re invincible, or sometimes we don’t even realise we are suffering under the pressure, and health issues, both mental and physical, can just creep up on us.
If we believe this is a stressful time for people, and if we believe we are happier and more productive if we are feeling well in ourselves, then we need to plan our own mental and physical health project. As I’ve mentioned before in other contexts, is something is important why not treat it as such, and make a plan as we would do with any other important work project?
The ACT has a wealth of information and resources in the Career Hub to support your business and behavioural skills. We also have a successful mentoring scheme, and in stressful times like these it can be good to have someone with whom to talk things through: our mentors have lots of experience including having worked through crisis situations in the past.
Also, some of the topics covered in our strategic insight podcasts are very relevant to today’s situation – so do tune in each Friday, or in your own time, for five minutes of reflection.
Caroline Stockmann
Background
The Policy and Technical team continues to speak with treasurers to understand what issues they are facing and in what areas the ACT can help. We are also talking with the main banks to understand how they are responding to the COVID-19 crisis. At the same time, we have held a number of conversations with HM Treasury, the Bank of England, the CBI, the City of London Corporation and UK Finance. Through these forums we have been able to ensure that the views of the treasury community are heard by policymakers through a number of different channels.
A list of useful material from the ACT, the regulators, government and others can be accessed from the ACT Knowledge Hub.
General overview
As the initial panic seems to have died down, we will be changing the frequency of these blogs to every two weeks and we will start to look at some thematic topics to provide more depth and insight.
One of the issues hampering the lending capability of banks is the regulatory framework and in particular, their leverage ratio. We understand the banks are in discussions with the regulator to seek adjustments to enable them to increase their lending capabilities.
The government furlough scheme currently runs until the end of June. For companies planning to make staff redundant, the rules require ‘collective consultation’ rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment[1]. For proposed redundancies exceeding 100 staff, the Redundancy Payments Service (“RPS”) must be notified 45 days earlier. This means that companies in this situation will need to have notified the RPS by 15 May 2020.
The CCFF scheme
As the scheme starts to bed in we have included utilisation data from the Bank of England (BoE) on the CCFF programme as one of the links in this week’s newsletter (https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/results-and-usage-data)
Taken from the BoE report, I thought the following table looked interesting.
The data shows that only 54% of applicants to the CCFF facility have currently drawn on this facility.
This supports some of the conversations we’ve had with treasurers who have applied for the facility as a back-up to their existing financing arrangements. We know that some treasurers prefer to access their own private financing arrangements as it offers the flexibility to pay bonuses and dividends without it being seen as taking government money to pay shareholders and senior management.
It also confirms some conversations and our own liquidity survey that suggest that borrowing requirements may peak in a few months’ time once the furloughing has ceased, salary and redundancy costs start to take effect and business restructuring starts in earnest – before any customer receipts start again.
We are starting to hear from firms that have been able to access the CCFF programme; we provide anonymised feedback to the Bank of England. If you’d like to share your experiences, please drop an email to technical@treasurers.org.
The CBILS scheme
UK Finance has also released figures in relation to CBILS. More granular information can be found here - https://www.ukfinance.org.uk/data-and-research/data
Based on their data the following graphs show the approval levels of the scheme during April.
Latest feedback from Treasurers
Banking:
Liquidity management
Access to government schemes
Capital markets
Quotes we have heard from treasurers include:
Update from the UK regulators
Views from across the world
As a member of the International Group of Treasury Associations, and the European Association of Corporate Treasurers and working with our colleagues in the US National Association of Corporate Treasurers we are keeping an eye on developments overseas.
Items that caught our eye include:
ACT Liquidity Survey
Please take a few moments to answer four questions that will help the ACT Policy & Technical team to weekly assess the liquidity landscape. All information is provided in confidence and the anonymised responses will be shared.
ACT Liquidity Survey - weekly responses
View last week's results from our ACT Liquidity survey here.
Engaging with the treasury community
Thank you to those who completed our survey on initial responses to the COVID-19 crisis. We are analysing the results and will share these with you shortly. Please continue to answer the 3 quick questions in our “temperature check” so that we can share with you the trends week on week.
We welcome conversations with our members on:
Send an email to technical@treasurers.org and either James Winterton, Naresh Aggarwal or Sarah Boyce will be in touch with you.
If you have found any resources which you feel we should add to our COVID-19 site, please email us with details.
Naresh