- A strong CFO has a strong treasury — and vice versa.
- Managing the company's debt investors is a job too important to be left to the Treasurer.
- Old treasurers never die, they just lose interest.
- Managing interest rate risk involves managing the treasury spread and the credit spread.
- International tax schemes often reduce taxes at the cost of future unrepatriable profits.
Technology & Operations
- Many treasuries are treated as cost centers and then starved of investment to reduce their costs.
- The objective is world-class use of technology, not the use of world-class technology.
- Buying a treasury system is like buying furniture: you live with your mistakes for a long time.
- Never, ever be a beta treasury software tester.
- Few treasurers know what their worldwide banking transactions costs are; even fewer manage them.
- Banking costs are not managed because they are the only charges that are automatically paid without being approved by someone.
- Treasury's to-do list will always include improving cash forecasting.
Structuring Global Treasuries
- A world-class treasury is only possible with world-class tax, accounting, and internal audit.
- By definition, with decentralized foreign unit treasuries, half of them will be below average.
- Letting local management own their cash is letting them make the Group’s capital allocation decisions.
- Foreign units should be focused on producing profits, not managing them — that's treasury's job.
- If your company is global, why isn't your treasury?
- Separate reporting of local unit treasury activities and risks is never equal to the quality of their regular financial reporting.
- A centralized treasury is not only efficient, it is also easily scalable.
- Many American multinationals operate in FX risk denial.
- The most common corporate FX hedging mistake is paralysis by analysis.
- The most common hedge metric — did the hedges make money? — is also the most meaningless because it ignores the gain or loss on the hedged exposure.
- If the foreign units are not measured on their FX and interest results, then they are being subsidized, and subsidies are always wasteful.
- A Treasurer who can't fund his company's needs will be calling his bankers from his outplacement cubicle.
- The smartest FX accountants in any MNC are the foreign unit controllers.
- Master FAS 133's documentation requirements and you've mastered FAS 133.
- If you are not willing to look after your own interests by competitively bidding your FX, you can't expect a bank trader to look after them either.
- Without FX performance metrics, the default metric will always be whether the hedges made money, a loser's game for treasury.
- While FX rates are mean-reverting in the long term, that does not mean that cumulative FX gains and losses on constantly changing exposures will ever equal zero.
- The best way to reduce FX risk is to reengineer the business processes that generate them.
- A common FX hedging mistake is treating options as if they are forwards - options are not buy-and-hold instruments.
- Managing emerging market FX and funding positions is best done on a consolidated basis as an active trading position.