Participants at the EACT Summit chose to attend two in-depth workshops to learn from leading treasurers, debate and share experiences in some of the areas where treasurers add the most value to their organisations.
Operating in New and Challenging Markets
During this session, Robert van der Zee, Treasurer of the World Food Programme (WFP), the UN agency dedicated to alleviating hunger globally, and Lorcan Travers, Investment Manager at Johnson & Johnson and EACT board member, shared their diverse experiences of operating in challenging markets. For WFP, the primary challenge in many of the 80 countries in which they provide food assistance is to get cash into the country, with cash based transfers, such as prepaid cards and mobile money becoming increasingly important as a way of getting aid to people quickly. For Johnson & Johnson, an AAA-rated company with $40bn of cash, the issue is the opposite i.e., getting cash out of the countries in which they operate. This is critical to maintaining the group’s AAA rating, particularly bearing in mind their risk to banks and commercial counterparties that have a lower rating.
In discussing both situations, participants agreed on the importance of applying global standards and processes, with some flexibility to accommodate regional variations. For WFP, for example, despite operating in challenging markets, two thirds of their flows now pass through SWIFT. For Johnson & Johnson, a regional treasury organisation, that balances market proximity with standardisation, has proved very valuable.
Finally, participants discussed some of the geopolitical changes that are affecting all markets, such as the potential impact of actions that President Trump may take during his term of office, and the Brexit process. Treasurers emphasised the need to remain nimble in dealing with unpredictability and change. In addition, the markets considered ‘challenging’ are not static, depending on market, regulatory, political and economic changes. Many of the countries in which WFP operated in the past, for example, are those that have experienced conflict; today, however, this is not necessarily the case, which impacts on the conditions in each country, the type of needs experienced by the population, and the best way of meeting them.