A comprehensive plan for setting up a trading organization is crucial. While many companies build work streams around the support functions needed for an individual trader, projects organized along the key responsibilities of the company’s top five senior executives—the chief executive officer, chief commercial officer, chief risk officer, chief financial officer and chief information technology officer—are much more effective.
The table below sets out six suggested work streams for successfully creating a commodity trading operation:
| WORK STREAM |
KEY RESPONSIBILITIES |
|---|
WORK STREAM 1 –
Overall Project Management |
- Create a detailed plan
- Track and question the progress continuously and rigorously
- Identify potential delivery risks and support/conduct quality assurance of deliverables proactively
- Support communication between project and stakeholders and among work streams
|
WORK STREAM 2 –
Chief Executive Officer |
- Promote the business model and business
- Establish organizational design
- Design and agree interface definitions/agreements (trading vs. exiting business)
- Design HR/Compensation
- Create ‘Day one plan’
|
WORK STREAM 3 –
Chief Commercial Officer |
- Provide clear vision on the future activity set
- Support recruiting efforts and talent selection
- Design new front office processes
- Ensure sufficient link to established parent company front office processes
|
WORK STREAM 4 –
Chief Risk Officer |
- Create an independent and powerful CRO and control function that also supports the business
- Align risk appetite of key stakeholders and operationalize through risk limits
- Create and implement a set of comprehensive best-in-class risk policies and processes
- Ensure link to existing (parent company) risk management approach
|
WORK STREAM 5 –
Chief Financial Officer |
- Ensure access to financing and other banking services and develop financing strategy
- Create tax-optimized company set-up
- Develop all back office processes and policies to support and control the business
- Ensure alignment with group finance functions and treasury
|
WORK STREAM 6 –
Chief Information Technology Officer |
- Establish system architecture to support business model and manage work stream requirements to a realistic level
- Ensure early selection and quick implementation of IT systems
- Manage multi-vendor/contractor environment
|
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