Treasurers Conference.

Keynote speaker Geoff Merszei, treasurer of Dow Chemical Co., noted the enormous changes that treasury has undergone since he started more than 20 years ago. He ticked off a list of areas where he thinks treasury can now add value -- areas like M&A, venture capital and risk management. In addition, "the Internet is a great enabler, allowing us to do more with less."

Risk management is a key function, Merszei said, focusing on the need for treasury to identify, measure and manage risk. Hedging is an important tool here, he said, arguing that failure to hedge is in itself a position. He related Dow's experience with combining the efforts of its Hydrocarbon & Energy business with treasury; the subsequent hedging strategies have paid big dividends.

The Dow treasurer recapped the company's widely publicized auction of corporate bonds on the Internet, a process he says was bad-mouthed by investment bankers leery of losing "exorbitant" fees. The Dutch auction, done last August, created very different pricing and allocation from a traditional bond offering, but Merszei was "thrilled" with the results.

In another presentation, Jeffrey Wallace, managing partner at Greenwich Treasury Advisors, touted the value of the Internet, both in the form of company intranets and the external links to the outside world. He urged treasurers to think of intranets as a marketing vehicle to give them more visibility within their companies, as well as to act as central repositories of information and document libraries. Wallace and session moderator Susan Stalnecker, vice president and treasurer of Du Pont, walked the audience through a series of internal Web pages developed by Du Pont's treasury function and a similar effort at EDS. The pages were filled with links to company information and policies. Wallace maintained that treasury should be accountable to others in the rest of the company for specific goals and service quality metrics, and to make those apparent by putting them on the Web.

In a timely session, Robert Krause, vice president and treasurer of American Axle & Manufacturing Holdings, outlined the SEC's new Regulation on Fair Disclosure (Reg FD) and some of the elements of investor information that pertain to it. While "materiality" isn't clearly defined, case law and SEC guidance have given a reasonably clear practical understanding of it, he said. What is clearly included are events such as earnings information, mergers, joint ventures, writeoffs, new products, contract changes, bankruptcies and changes in auditing firms.

Using his own company as a guide, Krause argued that only carefully chosen persons should be authorized to interact with investors. However, he said his company continues to meet one-on-one with analysts, and feels it can talk freely about general issues such as company goals, management, competitive advantages, long-term strategies and other such broad topics without falling afoul of the new rule.

In a stimulating presentation, "New Era" economist Brian S. West bury used an analogy of Christopher Columbus' plight as the impetus for today's businesses to attract expansion capital and get the U.S. economy moving again. Once Columbus convinced some early venture capital investors (like Queen Isabella) and made a successful trip to the new world, others jumped on board.

Westbury, first vice president and chief economist of Griffin, Kubik, Stephens & Thompson Inc., is the author of a forthcoming book, The New Era of Wealth. His view of the economic environment is generally positive, though cautious: He believes that in the short term, things will get worse as companies report more negative earnings, yet he's positive on the stock and bond market long-term. Westbury sees the eradication of inflation in our life times and is, in fact, more concerned long-term with deflation. He measures the economy by comparing a variety of indicators and charts that include inflation and unemployment, real federal funds rates, federal regulation (based on the total number of pages in the Federal Register), the price of gold and even medium and heavy truck sales.