I’m not sure whether there is a particular career path to becoming a Treasurer, but I suspect mine is less typical. I started out as an engineer having studied engineering at University being sponsored by British Steel. Following my degree, I joined an engineering consultancy practice, W.S.Atkins, where I used computer modelling techniques to analyse the operational stresses and strains of superstructures such as oil rigs, supertankers, nuclear reactors and the Seacat Ferry to determine whether we could extend their lives or to resolve structural problems.
After several years I decided to pursue a post-graduate degree in fluid dynamics but got side-tracked after a chance encounter with friends and ended up pursuing a PhD in quantitative finance at Imperial’s Centre For Quantitative Finance. Part of the requirement was to seek a sponsor which in my case was Cable & Wireless. I worked four days a week for their Head of Corporate Finance, Geoff Phillips, and the remaining day attending College to pursue my dissertation. I spent my time working on corporate structuring deals for M&A opportunities, and gained my first experience of working with a Corporate Treasury function. The Treasurer at the time, Jackie Giles, had a huge influence on me by including me in much of what was going on in Treasury at that time.
Following my PhD, I started working in Amir Eilon’s team, who was the Head of Equity Capital Markets at BZW, the forerunner to Barclays Capital. I joined the Equity Capital Markets division where I spent the first 6-months of my career, with two other colleagues, developing BZW’s book-building model for executing primary and secondary capital market share offerings. Our initial transaction was the secondary share offering for National Power and PowerGen on behalf of the British Government. I also worked on the convertible bond sales desk before transferring to the Capital Structuring Group where we worked on capital structuring deals for institutional and corporate clients. I subsequently worked for CSFB when the Equity Capital Markets division and its associated functions were sold by BZW.
Following a period of five and a half years in investment banking I decided I wanted to move back to a corporate environment and found an opportunity at ICI working for their corporate Treasurer Chris Vallance. I worked in a variety of positions on capital structuring deals, long-term funding, insurance, pensions, the disposal of legacy businesses and running their front and middle offices.
After four and a half years at ICI an opportunity arose to set-up the Treasury function at Associated British Foods, an international food, ingredients and retail business. My initial role was to establish a Treasury function that was fit for purpose for a Group with five divisional businesses operating in different sectors with different exposures, margins, competitive pressure and geographic footprints. We have operations in fifty-two countries around the world and sell into more than one hundred. The Treasury function at ABF provides day-to-day operational services to the businesses and acts as a centre of expertise for both financial and commodity risk management.
The last few years we have been moving towards integrating our risk management capability into our treasury platform which we have been developing for the last four years. Ultimately this could provide us with the opportunity to harmonise financial and commodity risk in one dataset enabling us to perform computationally time efficient risk analysis across different asset classes, utilising correlations between the asset classes to determine whether we are over or under hedging and potentially providing us with the ability to improve the way we manage risk and reduce costs. We already have a dynamic counter-party credit risk algorithm embedded in our platform which uses contemporaneous measures of risk such as credit default swap spreads to determine our counter-party risk to our financial banking partners. Using probability of default measures, we build a headroom measure for each institution and compare the remaining headroom to VAR calculations performed on blocks of trades passed through to 360T. The system switches off a counter-party from being able to compete for trades in 360T if the VAR exceeds the remaining headroom for that institution. We re-balance our portfolio of trades with that institution at the end of the day so they are then able to compete the following day.
The role of a Treasurer is incredibly varied although it obviously depends on the nature of the corporate you are working for. Areas that a Treasurer are exposed to include: corporate finance, pensions, insurance, risk management, legal, commercial contracts and M&A. No day is like another which keeps you motivated.
The recent period we have all been living through has been unlike any other I have experienced and its effects long-lasting. Technology has enabled many of us to work very effectively from home, but appropriate business continuity planning has been key to ensuring that everyone can function efficiently. The emergence of a big focus on mental well-being is positive as it has been recognised that remote working can have a significant impact on people’s mental health.
Like any team, the length of time in which we have been forced to work from home has had a draining effect on Treasury personnel, the lack of human contact and the blurring of the work-home divide can ultimately result in sub-optimal performance and is mentally draining on all of us. Having said that, Treasury has performed extremely well and provided all the day-to-day operational services to the Group they would have done if they’d been in the office. It is a testament to the quality of the people we have in Treasury, their diligence and the BCP processes we have worked hard to establish.
I’m a firm believer that you learn a great deal more when faced with adversity that when you are in a steady-state position. In my case I learnt a huge amount from my experience at ICI when ICI decided to change the nature of the business by buying the specialty chemical’s businesses from Unilever. Subsequently they became distressed sellers of their bulk chemicals businesses at the low point of the bulk chemicals cycle and became financially distressed. The experience of working through this challenge with a great group of people was of enormous benefit.
I think the ACT website provides a wealth of information to members and living and working in London I benefit from the large number of events the ACT put on.
I’m going to pick two: my Garmin watch and iPad. The first because of its fitness monitoring capabilities and the second because you can literally run your life from it.
Seek the opinion of others, be flexible and constantly challenge yourself
Inquisitive, flexible and resilient
I make use of Kindle, so I tend to have many on the go at the same time. The book I most recently started is Moneyball by Michael Lewis, written in 2003, after I watched the film with my family. It’s a book about how baseball was transformed by a statistical approach to populating your team resulting in a better overall performance and track record for the team given the budget at your disposal. This has had a knock-on effect in other sports such as American Football. Even if you don’t want to read the book, I recommend watching the film. I have also started his book called the Fifth Risk which looks at Trumps political appointments in a number of critical departments within the US Government.