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Description

This course is for treasury and finance professionals who want to effectively manage enterprise wide risks to actively support the business and its sustainable success. It will also help financial service providers develop corporate risk management solutions that are relevant and capital efficient, enabling their clients to become more creditworthy.

Learning objectives

By the end of the course, participants will be able to:

  • Improve efficiency and effectiveness of risk management activities through a better understanding of their strategic context, adding value to business streams and benefiting the bottom line
  • Develop objective risk management policies consistent with an enterprise-wide risk management framework
  • Evaluate emerging opportunities, particularly Blockchain and FinTechs effectively
  • Recommend the most appropriate investment decisions for your organisation
  • Effectively communicate key treasury considerations with stakeholders

Programme

Day 1

Treasury’s strategic role in Enterprise Risk Management and deploying a risk management framework

Start time: 9:00 am End time: 5:00 pm

Introduction

  • Presentation of tutor and participants’ expectations
  • Today’s risk management landscape:
  • Definition of risk – opportunities and threats to objectives
  • RM Frameworks – ISO31000, COSO 2017
  • Social attitudes to risk especially post Global Financial Crisis (GFC) – regulation and compliance; ‘safety’ vs entrepreneurship
  • Enterprise risk management concepts Integration of risk management with business decision making

Treasury’s role in Risk Management

  • Enterprise Risk Management and a risk classification for stakeholders; governance overlay

Risk Management Framework 1 to 3 (ISO 31000) -Identification, Assessment, Evaluation

Case study exercise

  • Analysing a business and its objectives eg commercial, returns to stakeholders, credit strength
  • Sources of risk and identifying key risks to objectives
  • Initial risk assessment and risk maps
  • Further assessment – risk evaluation and common methodologies

Risk Management Framework 4 –Developing & Implementing Effective Responses

Exercise – application to own business, & comparative, critical appraisal:

  • The critical importance of contracts
  • The life of risk in a contract
  • Perceptions of hedging and speculation
  • Treasury’s role in developing responses
  • Implementing responses using policies

Risk Management Framework 5 – Developing Effective Treasury Risk Management reporting

  • Reporting purpose & relevance to the business
  • Effective reporting – criteria and systems implications
  • Report examples for Treasury; dashboards
  • Measures and benchmarking – KPIs / KRIs etc
  • Consequences of risk management; modification, evolution of risks

Exercise & discussion – reporting in your business

Review key treasury Risk Management tools for ‘classic’ Risk management

  • Holding cash and the resulting real option
  • Financial derivatives
  • Documentary support eg security, guarantees
  • Commercial terms eg guarantees, take-off & price agreements

Risk and return – corporate finance and credit interactions

Case study / exercises:

  • The interplay between key credit ratios and the cost of finance
  • Managing risks and return criteria in business investments
  • Funding subsidiaries / projects abroad – FX translation risk and credit implications

Programme Day 2

Developing concepts in financial risk management

Start time: 9:00 am End time: 5:30 pm

Managing FX Risk – advanced deployment of outrights and options

Brief recap Day 1

Case study: Advanced methodologies in using outrights and options: is your Board aware of what can (and can’t) be achieved?

Managing Liquidity risk

How to manage liquidity risk within a Risk Management framework, considering factors such as:

  • Target gearing levels / credit rating
  • Spreading the risk through eg diversification, layering, pooling, maturities
  • The impact of fashion – sectors, covenants, funding sources
  • Estimating appropriate headroom
  • The cost / benefit playoff

Case studies from different sectors

Managing new risks 1 – macro threats

Behavioural aspects:

  • Effect of wealth on investment decisions
  • Over-optimism and overconfidence
  • Misselling or mispurchasing

Political and social risks and Compliance – regulatory eg EMIR, KYC, extraterritorial legislation eg FATCA, FTT, GDPR

  • Governance – Modern Slavery, Anti-Bribery
  • Sanctions, Financial Crime, AML and export controls
  • BEPS
  • Accounting changes and impact on credit (eg IAS 39 -> IFRS 9), IFRS 16

Managing new risks 2 – provider capabilities

  • Effect of Basel III / IV on banking economics and services and
  • Evaluating required bank returns and interaction with corporate credit strength
  • Bank credit strength
  • Bank splits – Vickers, Liikanen, Dodd Frank, Brexit
  • End of notional pooling and end of global banking
  • FinTechs, PSD2 (EU), APIs and new banks
  • AI, distributed ledger
  • Treasury systems development

New challenges – Cyber Security

  • What is cybersecurity, and cyber risk in managing the risk

New challenges – FinTech

  • RAROC and bank business models
  • The importance of credit
  • Regulation, tax, and sanctions
  • Rise of the machines and IT
  • Opportunities for FinTechs, non-banks and challenger banks
  • What is a FinTech (and other types of -techs
  • FinTech concept example: APIs and PSD2 – Apple Pay, Alipay
  • Where are FinTechs most active / successful – eg services, markets, regions
  • Do FinTechs have a future? Implications and opportunities for treasury – now and in the future

New challenges – Digital Ledger Technology and and crypto currencies (eg Bitcoin)

  • What is Blockchain?
  • Digital Ledger Technology (DLT) distinguished from cryptocurrency eg Bitcoin
  • Key concepts and types of DLT network

DLT aspirations and limitations

  • Use cases for DLT – success criteria, deployments to date
  • Smart contracts
  • Case studies – Ripple, IATA

Conclusion

  • Key take aways
  • What to expect in the future

Who should attend

  • Treasury specialists seeking to improve effectiveness in managing risks
  • Corporate bankers, solutions specialists and consultants wishing to build value-adding relationships with clients through a better understanding of their needs
  • CFOs, controllers in medium sized non-financial businesses seeking to improve their financial risk management skills
  • External and internal auditors seeking a better understanding of how treasury can contribute to assurance in non-financials

Experts

James has some 25 years’ experience in multinational treasury. He developed risk management strategies for FX, liquidity, funding and credit risks at Unipart, before moving to the Association of Corporate Treasurers (ACT), leading the education function and developing the world’s first articulati...

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