The past few months of unprecedented economic turbulence have brought interesting challenges for treasury professionals. As all organisations are currently operating in a climate of uncertainty or financial distress, the spotlight has fallen on the role of the treasurer as never before. Chief financial officers are subject to intense scrutiny on all aspects of a company’s figures and consequently a firm’s long and short-term cash position is now the focus for boardrooms, investors and the public alike. The upside is that the treasurer, often working autonomously, now has increased exposure and strategic decision-making input. A significant drawback exists for those professionals who have not prepared for, or who are ill-equipped to deal with, the pressing challenges their organisations now face.
Most companies, while not looking to expand their workforce due to revenue growth, have demonstrably looked to restructure their core management teams and, where appropriate, ‘up-skill’ key personnel. Different businesses with differing balance sheet issues require certain key attributes from their treasurers. While some will be focused on re-financing or phasing the maturity of their debt, others are looking for highly developed risk management and hedging strategies to be in place. For the treasurers who have built their skills base up over their careers to a high level, these conditions present a chance to add real value to their respective organisations. The impact of a successful treasurer on a business is now clearly evident with already seen examples of businesses being saved from the brink through astute treasury management. For those individuals who have potentially become expert in one arena and haven’t established traction in the area of most immediate importance to their companies, the market changes present significant risks to the security of their positions.
A key feature of many strategic reviews has been cost-base rationalisation including restructuring of the wider finance teams to produce leaner functions. The demand for larger and more effective treasury functions has been a feature, but conversely there has also been evidenced the merger of tax and treasury functions led by individuals holding newly created ‘heads of tax and treasury’ monikers. This position is a bi-product of cost saving initiatives and is a formula that has the capacity to work well as long as key principles are understood, such as no professional can be both fully adept in all aspects of treasury management while also being au fait with current tax regulations and strategy. A choice has to be made for CFOs looking for potential options for this role – is a tax professional or a treasury professional the most desirable option? Clearly, some organisations have difficult tax strategies and uncomplicated treasury needs or vice versa. In these instances, the post is workable and largely effective but would still need to be fully supported by a deputy with complimentary but divergent skills.
Whatever the chosen direction, finance directors now face difficult times where the guidance and support of capable treasurers will prove integral to future success.