This month’s guest editor is Association of Corporate Treasurers (ACT) council member Simon Neville. After retiring from consumer health and hygiene giant Reckitt Benckiser, where he was group treasurer, he joined Taulia as a non-executive adviser in May 2021. Taulia is an independent company operating within the SAP group – more than two million businesses in 150-plus countries collaborate on Taulia’s network to assist companies, both buyers and suppliers, access cash when and where they need it most, to improve their supply chains and make them more resilient and sustainable.
While at Reckitt Benckiser, Neville managed the group’s treasury and insurance teams, leading financing transactions worth more than £30bn, including more than £300m in supply chain financing.
His work has taken him to Hong Kong, Australia, Saudi Arabia and around Europe, and seen him take on senior finance leadership roles in groups such as Tesco, TOTAL, Jardine Matheson and Tullett Prebon.
Now based in Surrey, Neville welcomed the chance to catch up with the corporate treasury family at the ACT Annual Conference in Liverpool this May. At the conference he spoke of his concerns about developing the next generation of treasurers at a time when remote working continues to reduce the opportunities of face-to-face interaction. Here, he tells Philip Smith about the positivity provided by the conference, but also the negative sentiment surrounding the economy today.
The ACT Annual Conference was massively positive. To be able to interact and have those five- or 10-minute conversations with people, exchanging snippets of information and building market awareness, was a real benefit. I’m sure exhibitors will have also got a lot from the conference. Everyone was simply pleased to be back in the room.
The dinner was a hugely successful event, giving people the opportunity to socially network in a relaxed and historic setting. I caught up with people I hadn’t seen for the best part of two to three years; one can’t underestimate the value of what you get through exchanging ideas and discussing issues in person.
People are worried about inflation and increasing interest rates. This leads naturally on to the need to have dynamic and responsive treasury policies that will cope with liquidity, currency and commodity price volatility, amid concerns that we are also on the verge of a sharp downturn, and an almost inevitable credit squeeze. The treasurer skill set will remain in high demand and our profile will be elevated.
We have already seen inflationary pressures build from COVID-19-related expenditure, and the prolonged and very serious Ukraine/Russia situation clearly wasn’t on anybody’s agenda. Nevertheless, how businesses fund their working capital and build resiliency into supply chains is of increasing importance. Companies will likely need to support their suppliers and customers during this period, whether directly or through supply chain and inventory financing.
Supply chains had already become stretched due to geographical and COVID-19 constraints, so I suspect that businesses have put more inventory into their systems – if we now experience a slowdown, this could well exacerbate the problem.
At an individual level, I think we are seeing people reduce their discretionary spending in response to rising energy bills, mortgage rates and concerns over job security, and you could see some sectors, particularly in the hospitality and so-called ‘servant economy’ have real issues when demand falls.
For treasurers, this volatility will necessitate steady nerves, a need to plan cash-flow horizons and build in suitable contingency financing buffers. These are all basic, good practices, but rigour will be required. Short-term planning is always difficult – even if you can trim your own forecasts, it is often difficult to reliably see what might happen up and down your supply chain.
This is why collaboration and cooperation are so important, and why treasurers will be in demand. Buckle up!
Philip Smith is editor of The Treasurer
