TORONTO, ON--(Marketwired - May 02, 2016) - Despite the upheaval in commodities prices and the volatile Canadian dollar, more than one in four Canadian financial executives surveyed have no foreign exchange risk management strategy in place and almost one-third have no plans to implement one anytime soon, according to a new study by the Canadian Financial Executives Research Foundation (CFERF), sponsored by Cambridge Global Payments.
Yet 66% of senior financial executives surveyed rated FX risk management as important or extremely important to their company, with more than 60% saying it had become more critical during the past 12 months of volatility. Over the next 12 months, the majority's (68%) top foreign exchange objective for the coming year is to mitigate transactional exposure.
"During turbulent times, sometimes rash decisions are made. It's important to have a well thought out risk management plan in place, so that when the time comes, you already have that framework in place and execute accordingly in a systematic way," said Laura Pacheco, Vice President, Research at FEI Canada. "You're not just reacting, you're acting on a well thought out plan."
According to the survey, titled Exploring Foreign Exchange Enterprise Risk Management in Canada, this is due to three key challenges facing CFOs today -- lack of resources, difficulty measuring exposures and absence of internal knowledge. With this in mind, it is even more surprising that of the 100 plus financial executives surveyed, 25% stated that they do not consult with external parties on their risk management strategy.
"The research clearly illustrated the currency risk management challenges that typical Canadian businesses are facing," stated Karl Schamotta, Director of Foreign Exchange Research at Cambridge Global Payments. "With highly volatile commodity prices and exchange rates impacting operations, many CFOs are struggling to control exposures and maintain discipline. There are bright spots, however. A number of companies shared the strategies that they are using to capitalize on currency fluctuations -- broadly corresponding with our belief that removing emotional inputs and adopting a consistent policy-driven approach are keys to success."
To download the report, visit: http://www.cambridgefx.com/wp-content/uploads/2016/04/Exploring-Foreign-Exchange-Risk-Management-in-Canada.pdf
To read all CFERF's research studies: https://www.feicanada.org/cfo-resources/research-studies
FEI Canada will be holding a national breakfast seminar series, sponsored by Cambridge, kicking off in Toronto on May 3, 2016. Key findings of the study will be shared, and Karl Schamotta will be providing an outlook on the currency markets for the year ahead.
About Financial Executives International Canada (FEI Canada)
FEI Canada is the all-industry professional membership association for senior financial executives. With eleven chapters across Canada and more than 1,600 members, FEI Canada provides its members with thought leadership, advocacy services and extensive professional development opportunities -- including its executive education offering, the CFO Leadership Beyond Finance program. The association membership, which consists of Chief Financial Officers, Audit Committee Directors and senior executives in the Finance, Controller, Treasury and Taxation functions, represents a significant number of Canada's leading and most influential corporations. Further information can be found at www.feicanada.org.
About the Canadian Financial Executives Research Foundation
CFERF is the non-profit research institute of FEI Canada. The foundation's mandate is to advance the profession and practices of financial management through research. CFERF undertakes objective research projects relevant to the needs of Canada's senior financial executives in working toward the advancement of corporate efficiency in Canada.
About Cambridge Global Payments
Cambridge Global Payments is a leading provider of integrated cross-border payment services and risk management solutions. As a trusted partner for over 20 years, Cambridge delivers innovative solutions designed to mitigate foreign exchange exposure and address unique business needs. Our award-winning capabilities and industry-leading technologies simplify the way businesses connect with the global marketplace. As one of the largest bank-independent providers globally, we are flexible and responsive, with offices across North America, Europe, and Australia. Learn more at Cambridgefx.com and follow us on Twitter and LinkedIn.