Hedging myths VII - "We don't need a formal policy — our treasurer knows what they're doing."

Atlas sided with the Titans in their war against the Olympians. When the Titans were defeated, Zeus condemned Atlas to hold up the sky on his shoulders, alone, forever. The moment he stepped away, it would fall. Today he gives his name to the Atlas Mountains, the Atlantic Ocean, and of course, the eponymous geography guide.

A lot of treasuries are built on an Atlas.

One person knows the exposures, the hedge ratios, the bank relationships, the reasoning behind every position. It's all in their complex spreadsheet or head, and it works — until they leave, fall ill, or finally take the leave they've deferred for three years. Then the sky comes down, and nobody else knows how to hold it.

A policy, a documented framework, an auditable trail — that's not bureaucracy. It's the difference between a robust function and a single point of failure.

If your risk management can't survive one person's resignation, you don't have risk management; you have Atlas.

Formalize and systemize your treasury operations; it’s your best risk management strategy.

Who is our hero or heroine who will help us dispel the next myth “Hedge accounting is just paperwork”? Read here.