The Treasurer becomes the Confidant of the Board

The turbulent financial world changes the role of the treasury

In the digital age as businesses seek to become more efficient through increased automation there have been some suggestions that corporate treasury may evolve into a purely transactional role.

Financial group Nordea however has dispelled the fear of such “one terminal and a clerk” style treasuries emerging following a recent survey of corporate treasurers and chief financial officers.

The ‘Treasury 2017’ report found that instead of a narrowing of the role, global concerns over liquidity, hedging of risk and bank relationships is propelling businesses to see their treasury departments as internal advisers ready to provide strategic input on funding requirements and how best to limit exposure.

Nordea found that a key part of the treasury’s role is now providing advice to the business not simply executing transactions cost effectively. It stated that treasurers need to offer an internal advisory service for the CFO and the board and ensure they had the “capability and competence to advise on the big risks”.

Similar findings emerged from the annual ‘The Business of Treasury’ report from the Association of Corporate Treasurers.

It also discovered that treasury has become “increasingly strategic with a greater focus on solving wider business challenges beyond their traditional remit”.

Despite operational treasury management skills remaining core, 36% of the treasurers it surveyed stated that they were either directly defining their organisation’s strategy or were working in collaboration with colleagues to do so.

“Treasurers need to offer an internal advisory service for the CFO”

Over three quarters of treasurers believed that their organisation sees their role as a mix of both strategic and operational activities.

As such time spent on strategic issues had risen from 24% in 2013 to 40% in 2017.

So, what are they advising on?

The ACT said there are some areas treasurers are specifically leading on – financial market volatility, for example – but they are also taking a key or collaborative role in addressing other top business concerns such as cyber-security strategy, financial regulations, tax burden and fiscal policy, and how to deal with Brexit.

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Boards are also listening more to treasurers, accepting treasury recommendations – mainly around improving working capital and bank finance – 84% of the time, up from 63% in 2013.

Treasurers are also spending much more time on risk management issues as well capital and liquidity management. They are working most frequently with accounting and finance teams and least often with research and development departments.

The ACT also found that treasurers were often considered the “go to experts” by colleagues when it comes to interpreting the complexities of the modern world. This means giving advice and direction in areas such as financial regulations, analysing the opportunities in digital banking and looking at new financial markets.


This article was published in our Business Reporter Online: Future of Retail.
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