To find out what CFOs want out of their treasury teams, we asked two seasoned experts:
Bart Adam is a former financial controller, COO and big 4 consultant with more than 25 years of security industry experience. From January 2013 until 2021, he was the CFO of Swedish security multinational Securitas, then he stepped back into a consultancy role.
Neil Morling is currently the CFO of architecture firm Handley House. Before that, he held the CFO role at Olswang, as well as guiding the merger of EC Harris into Arcadis to form a global built asset consultancy.
Bart Adam Cash is of your upmost value and treasurers are really managing the cash for the entire company. In our case, we consolidate every day the entire cash pooling around the group globally into one place.
What you’re looking for in a treasurer is actually two things:
Neil Morling Experience is useful, followed by a really good network.
It doesn’t apply so much these days, but it used to be very much a case of who you knew and the deal you got. And while it’s far more regimented these days, I have seen treasurers worth their weight in gold simply because they had a very good list of names in the phone directory.
It is still about knowing the right people to go for, but I think there is also a lot to do with negotiation skills now, as well as knowing the system.
Generally, these days, putting any sort of financing structure in place can be rather arduous and time-consuming, in part because banks work quite differently and they can throw various things at you. So, having a treasurer with experience who can navigate that can be really useful.
BA In our case, treasury serves as our internal bank, and normally your bank is somebody you want to have a good relationship with.
For instance, all treasury centres at some point in time have also taken more responsibility for other parts of the balance sheet in their territory. I said to them, “Look, you need to act as a bank, so you also need to ask the questions a bank would ask internally.”
So, if the subsidiary is coming in asking for money, you need to ask, for instance: “What do you need that money for? How is your balance sheet looking? Can we improve your balance sheet? Can we work with your receivers?”
Taking that internal role – and the fact that they were allowed to ask those questions and not to act purely as a compliance function that simply follows the procedure – can be an eye-opener for them.
NM It really depends on whether you’re cash positive or cash negative. If you’re cash positive, I’d say the core skills come to the fore, making sure you get the best you can for the money. Cash negative is where they can be worth their weight in gold.
These days there is far more to a treasurer than just servicing the debt or making sure that the cash is working in those particular areas.
I would have thought their lives have become far more difficult as things become more regulated through almost every aspect of business we do these days.
And proactivity can help: if we’re in growth, for instance, I’d often look for advice if we’re looking to sell into a new country because there are so many money-laundering regulations and so on.
We recently had a query about Iran that the treasurer helped with: they said in theory the UK can trade with Iran, but if you’ve got any form of US business, you don’t want to be doing that. So it’s really helpful to have a treasurer strong enough to bring that up.
It’s funny because they’re often kept away in a dark cupboard somewhere and don’t come out, because normally the business doesn’t have that much interaction, but on things like that, they can be worth their weight in gold.
BA There are some misconceptions. If you look at treasury, to some extent you buy a lot of products from the market in the banking world. It’s a market out there.
If you issue a bond, that is really a market product where the market can be closed, or very active, the market can be very slow, and many things can happen; and the climate can change from one day to another.
If you feel now is the right time to approach the market, then you have to do that.
What I sometimes see is that other parts of the organisation don’t understand that and instead they think, ‘This is corporate. Everything is well planned and follows a procedure and a process. Why come with this in the last second, and why are you changing your mind from one day to the next?’ That is sometimes a struggle.
I see that on some products that we buy within the treasury department, it’s still a market out there where it’s a very active and ‘on-the-spot’ decision: we buy or we don’t buy, or we issue or we don’t issue, today or tomorrow. Sometimes I see that all the departments in our corporate world do not understand.
NM You have to work closely. At the end of the day, if they get it wrong and you suddenly fall foul of a covenant or you discover you’ve had half of your cash sat in a current account and the auditors will pick it up and get some Brownie points and management is left trying to explain it.
So ultimately, you have to be able to trust them, because from a CFO perspective, I almost like to park the treasury while I’m focusing on growth, acquisition, maintaining profitability and going after cash, which can be more demanding.
It’s an odd one. They are very important to me, but they almost need to be left alone.
Christian Doherty is editor of The Treasurer
