February 2011
James Chan, MBA ’96, manager of global foreign exchange and capital markets, Estée Lauder
Flexible hedging strategy and cross-cultural teamwork skills maximize revenues
On a typical day, James Chan arrives at the Estée Lauder Corporate Treasury headquarters in Melville, N.Y., at 8:30 a.m.
By 9:15 a.m., he has sent a “Currency and Capital Market Morning Update” to the treasury group, detailing a wide range of financial topics from the latest statistics to macroeconomic trends.
Global foreign exchange, in which overseas revenues are converted to income in USD, plays a critical role in determining Estée Lauder’s earnings per share and influencing major financial decisions, such as global loans and investments.
“My duties cover strategic financial planning, foreign exchange strategy and trading operations, accounting, financial reporting, bank relationships, dealing with financial regulations and compliance,” Chan says.
With such a hefty list of responsibilities many would find his job daunting, particularly during times of financial crisis.
Chan recalls, “I have dealt with crises like September 11, when US financial markets shut down, but we needed funding for our operations in other countries.”
However, he learned to react quickly and effectively to market trends, while simultaneously fine-tuning the company’s hedging strategy to maximize revenues, stabilize their projections and ultimately, realize Estée Lauder’s long-term strategic objectives.
“These crises teach us to enact global risk management policy and to spread our risk,” Chan explains. “For example, we geographically distribute counter parties exposure, instead of being concentrated in one location. I learned how to spread funding sources and have set aside emergency funds in more than one location to anticipate future financial crises.”
In this way, Chan must weigh many factors daily to set a clear strategic approach and adjust it accordingly, as his decisions definitely affect Estée Lauder’s financial results.
Fabrizio Freda, president and CEO of The EL Companies, writes on the corporation’s website: “This is an exciting time for The Estée Lauder Companies as we evolve into a truly global organization that understands our diverse consumers’ aspirations, no matter who they are or where they live.”
International operations generate more than half of Estée Lauder’s revenues. Chan oversees FX projects that involve Estée Lauder businesses in over 150 countries; therefore, his job function has become increasingly vital to the corporation’s financial welfare as it looks to expand their “global footprint.”
Yet, this is also what he finds most compelling about his work.
“My job has high visibility,” Chan says. “It could significantly impact our company’s bottom line.”
Chan says that he has cultivated a fascination with global markets since a very young age. He attributes much of his success in the field to the Johnson school and invaluable work and cross-cultural team experiences.
“Negotiation skills learned at the Johnson School enable me to obtain better pricing with trading partners and obtain information from multiple departments to improve our trading performance,” he says.
However, Chan also notes that most of his relevant knowledge comes from “on-the job” experiences, rather than from the classroom. In the past, he has worked with global organizations, such as the Associated Press, managing accounts in over 100 countries. There, he conducted frequent conference calls and face-to-face communications to continually gather information from branches to perform his duties effectively.
Chan advises students who are pursuing a career in foreign exchange and capital markets, to really get hands-on experience that will strengthen their international communication, teamwork, and negotiation skills.
“Technical know-how alone will not get the job done,” Chan emphasizes, “Other than technical skills and global economic knowledge, which are mandatory, cross-cultural teamwork skills are critical as US companies pursue international markets to target growth economies.”
***Chrysan Tung ’11 is an intern in Marketing and Communications at Johnson.
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