From trade issues to hurricanes, and from political upheaval to cybersecurity breaches and everything in between, multinationals today face dozens—or, more accurately, hundreds—of potential crises lurking in the shadows of global markets. These vulnerabilities put not only revenue at risk, but also supply chains, investments, access to corporate cash, and even timely disbursements of payments such as payroll for overseas employees.

"The last 10 years have been very interesting for anybody in international cash management," says Jim Scurlock, head of cash management for Microsoft. Staying ahead of all the myriad risks requires today's treasury teams to be vigilant about identifying potential exposures, to proactively intervene when possible, and to collaborate with other groups throughout the organization.

These are traits reflected by both winners of this year's Alexander Hamilton Awards in Operational Risk Management & Insurance:

Silver Award: The U.S. Postal Service had a sophisticated system for protecting customers' credit-card data, but a cross-functional team of treasury, IT, and security professionals determined that tokenization of card numbers would be more secure. The implementation of tokenization technology was fairly straightforward, but convincing hundreds of thousands of employees throughout the organization that it would work required carefully constructed and well-planned communications.
Gold Award: To reduce liquidity risk around the world, Microsoft worked with its banks to build one of the world's first multi-country, multi-currency zero-balance account structures. It also set up multi-bank cross-border cash sweeps out of high-risk countries and expanded its pay-on-behalf-of structure. All in all, these changes enabled Microsoft to reduce its global cash balances by around $1 billion. The company further reduced operational risks by establishing a contingency action plan through which employees in treasury and related functions monitor global trends, then respond quickly and decisively whenever they identify a risk.

How does a company empower treasury professionals to undertake such radical improvements? Scurlock says that in Microsoft's treasury function, "self-direction is encouraged. The leadership team has the attitude that 'If you have an idea, let's try it. Let's take the risks. If we're going to fail, let's fail fast and move on.'" The benefits of this leadership approach, he adds, are that "treasury staff feel empowered to engage with other teams across the company, and to make decisions on new ideas without necessarily having to go through a steering committee or get approval to pull in certain resources. We hire professionals and then trust them to take risks. I feel like this approach has never steered us wrong."

Congratulations to both Microsoft and the U.S. Postal Service for their outstanding initiatives! And thank you to the judges of this year's competition: Jean-Francois Heitz, former deputy CFO and treasurer of Microsoft; Craig Jeffery, managing partner of Strategic Treasurer; Marie Hollein, former president and CEO of Financial Executives International; and Prashant Patri, a principal in Deloitte's Global Treasury Advisory Services practice.

Finally, thank you very much to Citi, ION, and GTreasury for sponsoring this year's Alexander Hamilton Awards program. Stay tuned for additional articles and webcasts throughout the year to recognize the winners in our other categories, as well as the winner of the 2019 Alexander Hamilton Overall Excellence Award.

Read here about the 2019 Alexander Hamilton Award winners in our Treasury Transformation category, or register to view an on-demand webcast with that category's winners.
Read here about the 2019 winners in Technology Excellence and/or register here for the on-demand webcast.
Follow this link to articles about the 2019 winners in the Working Capital & Payments category and/or register here for that on-demand event.
Read here about the 2019 winners in the Liquidity Management category.

Instant Insights /

2019 Alexander Hamilton Awards in Operational Risk Management & Insurance

Related Stories

Recommended For You