Ghy white paper #3 presentation the role of corporate leadership 2013 (pc friendly)

2013

INTEGRATED TRADE COMPLIANCE STRATEGIES:

THE ROLE OF CORPORATE LEADERSHIP

REYNOLD MARTENSExecutive Vice President, GHY InternationalPresident, GHY USA Inc.

TRADE IS CHANGING THE LANDSCAPE

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

80

100

120

140

160

180

200

220

240

260

EXPORT VOLUME IMPORT VOLUME TOTAL TRADE

IND

EX

(1989 =

100)

TRENDLINE PROJECTION:TRADE VOLUME WILL EX-

PANDBY 1.4x TO 2020

NAFTA IMPACT ON TRADE

CANADA’S EXPORTS AND IMPORTS

United States49.5%

China10.8%

Mexico5.6%

Germany2.9%

Japan2.8%

United Kingdom2.3%

South Korea1.5%

France1.2%

Algeria1.2%

Italy1.1%

Other Countries21.0%

JAN-NOV 2011 IMPORTS: $409.3 BILLION

Data Source: Industry Canada, Trade Data Online, January 2012

CANADA’S INTERNATIONAL IMPORT SOURCES

United States73.5%

United Kingdom4.3%

China3.8%

Japan2.5%South Korea

1.2%

Netherlands1.1%

Mexico1.1%

Germany0.9%France0.7%

Norway0.7%

Other Countries 10.2%

JAN-NOV 2011FOREIGN MERCHANDISE EXPORTS: $381.7 BILLION

CANADA’S INTERNATIONAL EXPORT DESTINATIONS

Data Source: Industry Canada, Trade Data Online, January 2012

PROJECTED EXPORT MARKETS 2040

NORTH AMERICAN SUPPLY CHAIN

SECURIT

Y

RISK

REPORTI

N

G ERRORS

ENFO

RCEME

NT COSTS

REVEN

UE

LOSS

COMPLI

ANCE

EFFI

CIENCY

SAFETY

REVEN

UE

GENER

ATED

GLOBAL TRADE REGULATORS’ OBJECTIVES

Global Supply Chains

Global Markets

GLOBAL TRADE COMPLEXITY

2003 2004 2005 2006 2007 2008 2009 2010 20110

10

20

30

40

50

60

70

80

90

100

Audits

REGULATORY INTERVENTION TREND

WHO IS AT RISK?

RISK

Low Tech/Low KnowledgeFewer/Scarcer Resources

MultitaskingTotal Trust

Customs Low Priority140,000 Small Importers

Multiple PrioritiesPurchasing/Traffic Dept.

Many TasksLow Mgmt. Buy In

High Trust/High Risk9,000 Medium Importers

High Tech/High KnowledgeCustoms Champion/Dept.

High AccountabilityRisk Mgmt. Buy In By Executive

Importer of RecordCustoms Responsibility High

Priority1,000 Large Importers

AlwaysSome

Executive Team

CEO

Board

Efficient Profitable Competitive

Product Design

Production/Manufacturing

Global Sourcing

Supply Chain/Logistics

Shipping

Human Resources

Information Technology

Assets & Liabilities

Cash Flow Management

Regulatory Compliance

Risk Management

Financial Report

Administration

Domestic Sales

International Sales

New Export Markets

Contract Negotiations

Contract Management

Sales Administration

Marketing

CDN Customs BrokerUS Customs BrokerTrade Services

CDN AuditorsUS AuditorsLegal Services

Finance Services

SILO MODEL

Business Operations Financial Management

Product Design/Engineering


Global Sourcing


Shipping

Human Resources


Domestic Sales

International Sales

New Export Markets


Contract Management


Marketing




Risk Management

Financial Report

Administration

Business Development

Executive Team

CEO

Board


MinimizeRisk

OptimizeOpportunity

Integrated InternationalTrade Strategy

Predictable Compliant Sustainable

Service Providers

·Legal ·Financial ·Trade ·Customs

INTEGRATED MODEL

Piecemeal

Integrated Import

andExport

Integrated Import

or Export

RISK

LOW

HIGH

INTEGRATED COMPLIANCE STRATEGY

NONE FULLY INTEGRATE

D

None

INTEGRATED COMPLIANCE STRATEGY CONTINUUM

Priority Identified by Leadership

Compliance "Champion" or

Team

KPI Development

Systems to Track and Measure

Communication and meeting protocols

Growth Plans Factor Compli-ance Variables

Service Providers are Partners

BESTPRACTIC

ELEADER

7 BEST PRACTICES OF LEADING TRADERS

CORPORATE LEADERSHIP IDENTIFIED TRADE COMPLIANCE AS A PRIORITY

Compliance becomes part of Corporate Doctrine.

Recognized that consequences are significant and can be both Good and Bad.

Studies suggest only 40% of senior management have awareness.

1

7 BEST PRACTICES OF LEADING TRADERS

GOVERNANCE

STRATEGY

REPUTATION

RISK INTELLIGENCE

THE ROLE OF CORPORATE LEADERSHIP

MARKETS

SUPPLY CHAINS

COMMERCIAL

REGULATORY

BALANCE OF STRATEGY AND RISK

SUBSIDIARIESJOINT VENTURESSUPPLY CHAINS

MARKETSCUSTOMERS

PUTTING THE PIECES TOGETHER

BALANCE OF RISK AND OPPORTUNITY/EXPOSURE

Business Functions

Assessment

Adaptability

Implementation

Executive Team

AlignmentRisk Intelligence

CEOAccountability

Strategy

Board AwarenessGovernance

5-A MODEL

Business Operations Financial Management

Product Design/Engineering


Global Sourcing


Shipping

Human Resources


Domestic Sales

International Sales

New Export Markets


Contract Management


Marketing




Risk Management

Financial Report

Administration

Business Development

Executive Team

CEO

Board


MinimizeRisk

OptimizeOpportunity

Integrated InternationalTrade Strategy

Predictable Compliant Sustainable

Service Providers

·Legal ·Financial ·Trade ·Customs

INTEGRATED MODEL

1. IS GLOBAL TRADE COMPLIANCE CURRENTLY A SIGNIFICANT PRIORITY FOR YOUR BOARD?

2. IS YOUR BOARD AWARE OF THE IMPLICATIONS OF ITS INTERNATIONAL TRADE ACTIVITIES AT ALL LEVELS?

3. DO YOUR STRATEGIC PLANS ROUTINELY INCORPORATE THE VARIOUS RISKS AND OPPORTUNITIES ASSOCIATED WITH GLOBALIZATION?

SIX BENCHMARKING QUESTIONS

4. HAS A QUALIFIED INDIVIDUAL OR DEDICATED TEAM BEEN CHARGED WITH OVERSEEING TRADE RISK ASSESSMENT WITH RESPECT TO YOUR ORGANIZATION’S INTERNATIONAL SOURCING, EXPORT MARKET DEVELOPMENT, AND/OR GLOBAL SUPPLY CHAIN ACTIVITY?

5. ARE PROCEDURES IN PLACE TO TRACK, MONITOR, AND REPORT INTERNATIONAL TRADE COMPLIANCE RISK VARIABLES AT THE BOARD LEVEL?

6. IS THERE A PROCESS IN PLACE TO ANALYZE NEW GROWTH STRATEGIES IN EMERGING MARKETS AND ASSESS POTENTIAL INTERNATIONAL TRADE RISKS PRIOR TO BUSINESS DECISIONS BEING MADE?



WHITE PAPERS

REYNOLD MARTENSExecutive Vice President, GHY InternationalPresident, GHY USA Inc.204-947-6700 [email protected]