At Google Inc., the rapidly growing Internet stalwart, foreign exchange management took a while to catch up to the rest of the business. In mid-2007, Google's annualized revenues of roughly $12 billion were 50 percent denominated in foreign currencies, yet it had only one person on staff charged with managing FX issues, and he was part-time to boot. "We see our FX program as insurance and not a way to profit from market movements," says Brent Callinicos, Google vice president and treasurer. "Our mission is to protect our net assets and our cash flows from negative fluctuations in FX rates."

Saddled with an outdated and short-term FX policy–Google lacked a cash flow hedging program and its balance sheet hedges were limited in size and scope–and bereft of treasury accounting resources or even treasury systems, Callinicos put together a staff of FX managers and developed sophisticated processes and world class policies to bring it up to speed. He had cut his teeth at Proctor and Gamble and later at Microsoft, building both companies' long-term cash flow forecasts "mathematically," as he puts it, "to figure out whether to hedge or not."

For example, he established a maximum hedging period of 18 months with minimum hedge amounts for each period. Add to this a cash flow hedging program that qualifies for FAS 133 treatment, a new systems platform automating and streamlining FX activities (Google implemented FiREapps, a software system determining its historical and forecasted FX exposures), and an augmented staff of three FX managers in the 25-person treasury department, up from just six employees in the department a scant 18 months ago.