In challenging times the role of the treasury professional body comes into its own, as Dympna Donnelly, VP Treasury at SAP, and current President of the Irish Association of Corporate Treasurers (IACT), explains.

When financial and economic challenges seem insurmountable, the role of the treasurer comes to the fore. But to enable the treasurer to remain calm and collected a network of support is required. The work of Ireland’s professional treasury body, IACT, helps provide this support, bringing together peers from across the sectors, raising awareness of the big issues and exploring solutions.

Two of the biggest externally-driven issues of the day for IACT’s membership (and for many more besides) are the impact of Brexit, and the replacement of LIBOR. With the precise nature of their impact yet to unfold, strong elements of the unknown prevail, notes Dympna Donnelly, VP Treasury at SAP, and current President of IACT.

Brexit is likely to cause issues around disruption to the supply chain and the financing thereof. “Ongoing uncertainty means that Brexit planning is somewhat vague and limited in scope; there are still so many unanswered questions,” says Donnelly. “But regardless of how Brexit unfolds over the next 12 months, treasurers must remain engaged.”

The shift from LIBOR and EONIA to SONIA and €STR has a more direct treasury impact. Uncertainty still abounds here, the outcome of the ECB’s paper on €STR, due in October, hopefully quelling this for businesses using LIBOR-indexed floating rates.

Before the switch in 2021, treasurers must review, possibly amend, and certainly secure agreement on all associated internal documentation and external contracts with banks and other third parties. Many questions remain unanswered but, notes Donnelly, the sheer volume of work involved in probing legal documentation, talking to banks and understanding LIBOR’s replacement, should not be underestimated.

Helping hands

Brexit remains a series of unknowns whereas LIBOR has a more defined process around it, albeit one that places a heavy demand on treasury resources. However, these events are just part of a wider series of treasury concerns over the coming months and years.

IACT plays an important supporting role for members. It runs regular breakfast briefings and roundtables on all the hot topics, calling upon independent experts to deliver a treasury slant to the ensuing discussions.

IACT also organises an annual conference in Dublin (this year held on 20th November), curating an impressive international speaker list, this year featuring Holger Neuhaus, ECB’s Head of Division, Money Market & Liquidity, on interest rate benchmark reform.

The 2019 event, notes Donnelly, is “very timely”, following (all being well) both the publication of the ECB’s guidance documentation on LIBOR, and Brexit conclusion. Treasurers may at last be able discuss and respond to these events with some certainty.

Notwithstanding the outcomes here, the ongoing facilitation of highly interactive networking opportunities are a key part of IACT’s remit as a professional body. On a personal level, Donnelly, having progressed from accountancy into treasury, knows first-hand of the benefits of meeting peers, face-to-face.

“There was a huge learning curve for me moving into treasury. I found the IACT, and the whole networking experience, an excellent way to learn about the hot topics and how to deal with them,” she comments. “I would encourage all treasurers to get involved with the IACT to keep themselves fully informed in a constantly and rapidly changing economic, technical and regulatory environment.”

As a means of talking to, learning from, and sharing with other treasurers, IACT is a vital source of information on everything from day-to-day matters to extraordinary macroeconomic events such as Brexit. Acting as a conduit for expertise from diverse sources, such as banking, legal, taxation, accounting, and technology, it channels relevant information to keep treasurers up to speed.

The benefits extend far and wide. Indeed, by liaising with national agencies such as IDA (which is targeted with boosting inward foreign direct investment into Ireland), Donnelly says IACT is well-positioned to knowledge-share with the world’s corporate community, an added attraction for corporates considering investing into Ireland.

Combined with Ireland’s pro-business stance, it’s easy to see why the number of specialist treasury operations in Ireland is increasing. With IACT enabling treasurers to leverage the country’s professional network, it is fostering an improved understanding of the key domestic and macro issues.

With the help of IACT, treasurers with the right connections are helping to create a greater level of expertise amongst the community, and an increased awareness of the importance of the role at the wider organisational level. In the current environment of uncertainty, every business stands to benefit.