What are the main risks concerning the corporate treasurer? Permjit Singh Treasury Consultant finds out
US based Treasury Management consulting firm, Treasury Strategies (a division of Novantas Inc) has released its "Annual State of the Profession" Treasury Management survey. It makes for interesting reading of the latest thinking of many corporate treasurers, in particular what they think are their primary and secondary risks.
With the pace of development of treasury technology and Treasury department employees working remotely, not surprisingly, the risk of fraud and cyber security, and personnel management, are high on the list of primary risks facing treasurers.
Reflecting the investment and raising of funds, another risk for the treasurer is the rate of return received or paid on funds. Though the interest rate environment that has been low (a concern for investors) interest rates are threatening to rise owing to inflation and so inevitably means higher interest costs for treasurers to pay on borrowed funds.
Secondary importance risks for the corporate treasurer included internal and external operational processes and controls; volatility of commodities, foreign currency rates, and interest rates; replacing LIBOR; upgrading the Treasury Management System because it cannot cope; and restructuring bank loans.
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