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Our opposition to the ASB’s proposal to use a risk-free rate to discount pension scheme liabilities has been the subject of an ACT press release earlier this week; it will be interesting to see how much external attention is paid to the arguments that we and other organisations are making. At the heart of our opposition lie two strands: that there is an underlying inconsistency between the approach proposed for valuation of assets and liabilities – and this should be addressed; and that the standard setters cannot disregard the societal consequences of the arbitrary conclusion on the use of a
It is good to know that officialdom takes its report writing duties seriously. The European Commission has its own internal guidelines on writing the Impact Assessments that are needed to justify any new regulations, and it makes a good piece of advice. For anyone doing investment or business project appraisals these guidelines could be adapted to become a good prompt sheet on what to look for and, especially, how to ensure an absence of bias.
Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), was published in the Official Journal of the European Union on 4 July 2008 If, as treasurer, you were to put forward a project which would absorb an enormous amount of management time, but have no (other) effect, you might doubt if you would get the project approved.
Treasurers are responsible for the capital structure and funding strategy of their companies. That includes the funding element that comes from equity, but yet I bet most of us spend the bulk of our time on the debt side of the balance sheet.
The current economic and financial conditions have put the spotlight onto those dealing with the funding and cash, and we find the media – particularly the Financial Times – seeking our views and probing on how the ACT’s members are responding. We were particularly pleased that the FT gave considerable coverage to our note on Contingency Planning for a Downturn.
I have always argued that treasurers’ mettle is tested during volatile times but I do not think that many of us would have wished for today’s highly uncertain conditions in order to create opportunities for the exercise of good professional treasury management. Markets continue to develop in unexpected ways and clearly the experience differs greatly depending on geography.
Dealing with change in a volatile world was the title for our annual conference that has just finished in Edinburgh. Back in the middle of 2007 when we started planning for the event I doubt any of us anticipated just how topical our content would be – and how appropriate would be the contribution of our keynote speakers.
It will be obvious that we at the ACT just like all organisations have a strong interest in the health of the financial sector and the wider economy. Although I have described before how market ‘stress’ should bring out the best in the professional corporate treasurer, nonetheless the overall prosperity of our members’ employers – and therefore the chance to grow and develop careers – is of paramount concern. The combination of individuals’ career experience to-date and success with the ACT’s qualifications – where rigorous but fair assessment is a key distinguishing feature – equips our members to respond to