Several finance leaders shared their thoughts on international finance and currency risks during a panel discussion at the 2018 Chief Financial Officer Leadership Forum in New York on November 28. The panel discussion, “International Finance and Currency Risks,” featured the following participants:
Chief Financial Officer
Senior Vice President, Head of Treasury
China Construction Bank
The panelists focused on a variety of finance topics, including:
Organizations may be responsible for managing operations in different countries, along with complying with myriad mandates across the globe. Meanwhile, a finance team must consider the global nature of an organization’s operations in its day-to-day activities.
Finance teams must account for the global nature of finance in their hiring decisions. That way, these teams can find and employ talented professionals who possess the necessary skills to thrive in an evolving global marketplace.
Today’s finance professionals must be agile and ready to adapt to changing global market conditions. Plus, these professionals must continue to update their skill sets based on the global marketplace. If a finance team hires professionals who are prepared to work in a constantly changing global marketplace, this team may be better equipped than ever before to expand worldwide.
“We definitely need additional skill sets in practically every function in finance once you start crossing borders,” Vuono said. “You’re trying to maintain liquidity in multiple locations, and the rules aren’t all the same [in these locations].”
Finance involves continuous planning. If a finance team is data-driven, it could identify market patterns and trends and map out its short- and long-term goals accordingly.
Also, a finance team should be willing to adjust to the global marketplace as needed. If a finance team is prepared to make changes based on market conditions, it can quickly modify its plans and keep pace with the global marketplace.
“If you’re expanding … you have to plan continuously and make adjustments as you go,” Min stated.
A finance team must include professionals who collaborate and communicate with one another. Otherwise, this team may struggle to achieve its immediate and long-term goals.
By searching for professionals who possess strong communication skills and diverse backgrounds, a finance team can add professionals who can work together and bring a variety of perspectives to discussions. Perhaps best of all, this finance team can build a culture based on coordination and cooperation and set a positive example for different departments across an organization.
“[A finance team has] to work together and face challenges together as a team,” Vuono stated. “And you have a tremendous opportunity to become an example for the rest of the organization.”
Finance professionals are tasked with helping their respective organizations manage risk. Yet finding the best ways to minimize or eliminate risk is difficult, particularly for finance teams with limited time and resources at their disposal.
For a finance team, it is crucial to weigh the pros and cons associated with everyday decisions. Even a minor decision can cause major problems if it is not evaluated properly, and as such, a finance team should perform extensive research and due diligence throughout the decision-making process. With this approach, a finance team can boost the likelihood of simultaneously managing risk and capitalizing on revenue generation opportunities.
“You can manage a risk by hedging and realize the potential savings to the bottom line, and it can be pretty significant,” Min indicated. “The market is risky, and there are both opportunities and risks, but risk can be managed effectively.
Furthermore, finance professionals must understand the current and future regulatory environment, regardless of industry.
Failure to learn about the regulatory landscape may prove to be costly for global organizations. If finance professionals monitor the regulatory environment, they can help their respective organizations avoid potential penalties.
“The increasing regulatory environment is doing a lot of the work for banks,” Sansone said. “There is risk that has to be managed … and we try to keep our corporate clients not up at night by helping them manage risk.”
Finance leaders must understand their roles within their respective organizations. They also must be ready to contribute in any way possible and ensure an organization can manage risk and make informed decisions.
Additionally, finance leaders must prepare forecasts that they can share with business executives. These forecasts drive informed decision-making and can help an organization effectively manage risk both now and in the future.
“You have to have an interest rate forecast,” Sansone pointed out. “[In banking] you need to forecast the cost of funds over the next two to three years.”
ABOUT JOHN VUONO:
John Vuono has served as Chief Financial Officer of Ashcroft for 13 years. Prior to his time at Ashcroft, Vuono served 15 years in senior financial roles with Hasbro’s U.S. Toy Division, Victoria’s Secret Stores, Wachovia Bank and in public accounting.
ABOUT JOHN MIN:
Dr. John Min is currently Chief Economist with Tempus. Prior to working with Tempus, Min was founder and Chief Economist for World First USA and worked as the Vice President of Sales for Ruesch International, an international financial institution based in Washington DC.