The opening session of The Treasurers’ Conference (TTC), held in Edinburgh last month, asked the assembled treasurers to focus on getting the priorities right for the treasury department. The session sparked a complex and farreaching debate, but certain themes stood out for the delegates, both in that session and over the whole of the conference.
It is clear that treasurers are keen to understand the phenomenon that is private equity whatever their private views of the merits or otherwise of the industry. Treasurers may be able to learn some lesson from the private equity approach to leverage and to risk appetite. Beyond leverage, treasurers should be well placed to understand and assess private equity’s claims on how it creates shareholder value and its appetite for risk. Treasurers are immensely well equipped with financial risk management skills. And while they grapple with the well understood risks of liquidity, foreign exchange and increasingly inflation, the question arises whether treasurers should be looking beyond their traditional risk and responsibilities to take on enterprise-wide risk responsibilities.
It is still not certain whether treasurers can transfer the models they have developed in the finance department to help manage risk on a wider front. They grasped the challenge of pension risk management, but are they able and eager to take the lead on the next corporate risk crisis? All of TTC demonstrated that treasurers are aware of the problems that are facing their employers. But it is one thing the treasury profession knowing that, and a different matter entirely to communicate the treasurer’s knowledge, skills and competencies to the rest of the organisation.
Treasurers have to ensure that they are not hidden in a backoffice. They have to demonstrate that they are commercially attuned and can add value to corporate business models which are under pressure and changing rapidly. One example of this is the emerging issue of financial supply chain management where treasurers can work with other parts of the business and use their well-developed skills to reduce liquidity risk and enhance cashflow management. These are just some of the host of demanding subjects that treasurers are being asked to deal with. One question raised at the conference was whether this was a good time to be a treasurer. Only working treasurers can answer that question. But what is abundantly clear is that it is an eventful and interesting time for the treasury professional. In that sense alone, the rewards must be high.
PETER WILLIAMS
Editor
See Conference report, page 12
