The idea that anything good might come out of the credit crunch may seem at this stage of the game little more than wishful thinking. But for the treasury profession a refocus by the board on the financial issues that drive the business and shareholder value should bring a spotlight on the role of treasurers and the contribution that they make.
This was undoubtedly the sentiment at the recent talkingtreasury event in Amsterdam. Treasurers from across Europe met to reflect on the credit crunch, strategic risk management, and treasury as an integral part of any successful business. In the days when borrowing money from banks and raising finance in the capital markets were as easy as taking candy from a baby, it was perhaps unavoidable that the role of the treasurer would slip down the corporate worry list. A trend emerged for treasury to merge with other departments.
Those days are now gone. As we point out in the cover story (see page 24), corporate treasurers now face the question of how best to fund their companies in an uncertain environment. Credit spreads have already widened considerably, inevitably affecting businesses as the returns from any project must now be higher to justify the investment.
The key aims for treasurers with funding pressures should be twofold: to have various funding options at their disposal, and to determine which assets will provide them with immediate value.
The CEO, along with the rest of the board, has a renewed interest in the output of the treasury department, especially cash and liquidity management. The higher profile of the treasurer means bigger opportunities, but these won’t be handed to the profession on a plate; they have to be seized and that could mean discovering a whole new set of skills alongside the technical aspects of treasury.
The basic functions of treasury are vital and need to be executed properly. But there is an opportunity to go further. Treasurers need to learn to sell their own expertise to other parts of the organisation. They also need to appreciate that what may be blindingly obvious to them isn’t to others, so polishing those communication skills is crucial. This is not only about promoting treasury within the company; it is also about career progression. Do senior treasurers want to be tucked away in the back office confined purely to the treasury function (important though that is), or to become an integral part of the business?
Different situations and structures apply in every organisation, but there is now a genuine opportunity for the treasurer to gain greater influence and help improve shareholder value: now is the moment for treasurers.
PETER WILLIAMS
Editor
See Adding Value, page 40
