Asked about the priorities for 2008 one finance director answered succinctly: “Manage cashflow and liquidity.” No doubt those words will be the mantra for many FDs as the evidence mounts of tougher times ahead. Of course, when FDs in large corporates promise to manage cashflow and liquidity, what they mean is that they will delegate the task to the treasurer and his or her team, but the FD – and the rest of the board – will be taking a more than usual interest in the figures to make sure there are no nasty surprises.
The treasury profession is now the subject of great attention and interest because of the serious effect that the credit crunch is beginning to have on corporates. At one time it was thought (or was it hoped?) that the credit crisis would bypass the real economy, but that hope is starting to look increasingly in peril. The Deloitte CFO quarterly survey reports that nearly six in 10 chief financial officers of the UK’s major companies now believe that the recent turmoil in credit markets will hit their business this year. This is a marked deterioration from the position in September when only 42% expected a negative impact. However, CFOs are confident that their businesses can ride out the storm. We can only hope their treasurers are equally confident.
While a wider audience is now interested in cash and liquidity – an area until recently seen as the sole domain of the treasurer – the question has to be, what lessons can treasurers and others learn so far?
For corporates there is one obvious lesson. Treasurers know that the cardinal sin of the profession is to let the company run out of cash. To prevent this happening, corporates need to ensure that the people in charge of the treasury are qualified and up to date with the skills and competencies needed to cope.
Those in treasury roles need suitable ACT qualifications. This issue contains the names of those who have passed the recent diet of ACT exams, plus three mini-profiles of ACT members who are clearly adding value to their organisation through the diligent exercise of their treasury skills. We also cover the launch of a new ACT qualification, the Certificate in International Treasury Management (CertITM).
Another lesson is that life can carry on and opportunities still exist. Our Deals of the Year coverage underlines that, as, in the best football parlance, it was a year of two halves. But even the post-crunch period saw deals executed which any treasurer would be proud to call their own. In particular, the launch this year of The Treasurer’s Team of the Year Award recognises the need for financial professionals to work together, and the judging process found some outstanding teamwork across the range of treasury disciplines.
The halcyon days of cheap, easy credit and walls of cash may be over but treasurers can still play a huge part in ensuring deals can be done.
PETER WILLIAMS
Editor
