IGTA Journal - Summer 2020

MANAGING RISKS AND C-SUITE EXPECTATIONS DURING A CRISIS During times of crisis, treasury and nance are often called upon to answer strategic questions from the CEO, CFO and board, and to ultimately calm the storm within the organisation. As they look to balance policy changes while assessing news and data in uncertain times, it is up to treasury to focus on business continuity, activating liquidity and minimising the disruption to the global supply chain. CEOs and CFOs need quick answers to questions they get from the board and investors about the company’s nancial state. Do we have enough liquidity for the next week? The next month? Can I trust my liquidity forecast? Are we su ering fraud losses? How can we sustain supply chain disruptions? What CEOs, CFOs and boards expect from finance In a crisis, the emphasis is obviously rst put on people – focusing on employee safety and ensuring customers have what they need. After these concerns have been addressed, executives turn their focus to the business, asking whether or not they have access to the right data, making sure there is enough cash, guring out what key person risks they have and how they can support that. Ultimately, there are eight main risks CEOs and CFOs will tend to focus on. It is up to treasury and nance to be able to address and mitigate these risks: 1. Human resources; 2. Internal processes, tools and controls; 3. Liquidity instability; 4. Fraud; 5. FX and interest rates; 6. Debt and counterparty risk; 7. Revenue volatility; and 8. Supply chain disruption. Human resources A major concern to CEOs, CFOs and the board when it comes to treasury and nance is key person risk and competency reduction. Boards and investors ask: what will happen if a portion of the nance and treasury function is unwell, hospitalised or taking care of loved ones? What happens if there are layo s? Are employees able to perform all of their day-to-day duties from home? Now more than ever there is an increased importance in embracing automation and technology. Working with software as a service-based solutions (SaaS) ensures employees can access the data they need and carry out everyday tasks no matter where they are. Automating manual processes not only mitigates some key person risks, but also reduces errors. Internal processes, tools and controls As companies adjust to new processes and mandates, business continuity issues are sure to arise. And business continuity plans (BCPs) that weren’t made to be long-lasting will, over time, show gaps in processes and systems that can become increasingly dangerous to the business, especially if an organisation is reliant on manual processes and spreadsheets. Investing in systems that support automation, business 34 June/July 2020 treasurers.org/thetreasurer TREASURY FUNCTIONS ARE OFTEN THE FIRST PORT OF CALL WHEN IT COMES TO BOARDS SEEKING CLARITY ON RISK AND LIQUIDITY. SIMON SHORTHOSE OFFERS SOME POINTERS ON EIGHT KEY ISSUES IGTA eJournal | Summer 2020 | 35