Getting Ahead in Treasury
Much has been said about the changing role of treasury in recent years as many treasury professionals expand their remit and engage with a wider range of internal and external counterparts. What has been discussed less regularly is how these expanding responsibilities impact on the skill sets that treasury professionals need to maintain to satisfy them. This issue is relevant not only to a treasurer’s ability to fulfil his or her current position, but also how treasury professionals position themselves for their next career move in a competitive marketplace. Furthermore, how does treasury need to change in a rapidly changing business environment?
In this article, we talk to two highly respected recruitment consultants who specialise in treasury: Mike Tucker, Director, MR Recruitment and Deborah Thomas, Partner, Gowerbridge Ltd. These professionals are joined by Will Spinney, Associate Director, Education, and James Lockyer, Development Director of the Association of Corporate Treasurers (ACT), the UK membership association for treasury professionals, and premier provider of treasury education, training and events.
All change and no change
Many treasurers are experiencing dual pressures: on one hand, the renewed focus on liquidity and risk in their organisation means that core disciplines of treasury have never been more important; on the other, they are expected to expand their remit into new areas that require new skill sets. As Will Spinney, ACT outlines,
“In some respects, nothing has changed in treasury, in that the core principles of managing liquidity, risk and financing remain the same; however, in others, everything has changed, as these issues have become essential business priorities, particularly amongst companies with lower credit ratings.”
“The markets themselves are also changing, which requires treasurers to take a different approach. No longer can treasurers manage the entirety of their business through a single location such as London, they need to take into account the global nature of the business, particularly in emerging, high-growth markets where the regulatory and market environment is more challenging.”
The growth of regional treasury centres, shared service centres and a balance between local finance teams and centralised treasury functions are all part of this developing trend. From a liquidity perspective in particular, however, James Lockyer, ACT emphasises that treasury professionals within companies of varying scale and credit quality have had differing experiences of the global financial crisis,
“Inevitably, a number of the largest companies have seen little impact of the global financial crisis on their business so they have not changed their treasury models. These are often the most influential companies in the treasury profession, which may give the impression at times that nothing has changed. However, although liquidity may not pose a challenge for large, highly rated companies, risk must be a priority for companies of all sizes, and the impact of political, economic and reputational risk can shake the company’s foundations as the experience of BP following the Gulf of Mexico oil spill illustrates.”
“For most companies, however, access to finance is far more constrained than in the past, not only in terms of access to cash, but also on what this is used for. This can lead to a situation where the direction of a company’s business strategy is limited by the availability (or cost) of funding. Treasurers therefore need to be innovative and flexible in their approach to financing in order to support the business. For example, large supply chain finance programmes now effectively mean that some companies have become banks to their suppliers, so for these companies, in fact treasury activity may have changed substantially.”
Developing ‘soft’ skills
While treasurers’ expanding remit involves a number of new technical skills, such as alternative financing and liquidity structures, it is not only technical skills that are required. Traditionally, treasury professionals have come from a finance or accounting background, or have pursued a long-term career in treasury. The question is therefore whether the education, training and experience that they have pursued in the past fully equip them for the current role in which they are employed and future roles that they may pursue. Will Spinney, ACT emphasises that treasury qualifications remain essential,
“With a rapidly changing liquidity and risk environment, and changing ideas on risk appetites and budgets, treasurers need qualifications as a vehicle for gaining new experiences and then apply them to their own company’s situation.”
James Lockyer, ACT continues,
“Treasury qualifications play an essential role in developing skills beyond an individual’s direct experience. ‘On-the-job’ training is not enough to sustain a treasury professional’s career, as experience of one company or type of treasury neither provides the breadth to take a career to the next stage or a new direction, nor equips them to deal with novel challenges.”