Were the treasury community ever to need one of their own to champion thinking outside the box and questioning the norms of the profession then Lisa Dukes, an award-winning treasurer and co-founder of corporate finance and risk management firm, Dukes & King, would surely be happy to oblige.
Dukes strongly believes a vital role for treasurers as guardians of a company’s finances is to challenge conventional wisdom. It’s a role that Dukes clearly relishes. Indeed, she believes it is her passion for corporate finance and derivative risk management coupled with her “tendency to challenge the status quo” that have helped her to play a prominent, if not leading role, in the development of a series of novel, award-winning strategies and products.
A number of those accolades were bestowed on Dukes at renewables energy provider Drax, where she spent almost a decade and a half of “very fruitful” years and, until very recently, held the full-time role of group director of corporate finance & derivatives. She has seen a lot of changes at the energy generator, which has almost completely finished its transition from coal to biomass.
“I’ve been very fortunate to have worked at Drax, and see the company go through many change cycles that required nimble management and continuous innovation within treasury, corporate finance and derivatives,” says Dukes.
“I’ve always been drawn to the technical aspects of any role, but over and above that, I do have a real soft spot for corporate finance and structuring, especially derivative risk management, where there can be a lot of hidden risks but also a lot of hidden value.”
One of Dukes’ most notable achievements at Drax was to spearhead the development of an extensive suite of ESG products, producing global first-of-kind products across the entire capital structure covering working capital, debt, and derivatives. Several of these products, including a trailblazing ESG-linked FX derivatives initiative, led to accolades and awards.
Dukes’ trophy cabinet – yes, she really does need one – is packed, though she is quick to stress that the honours belong equally to her and Chris King, with whom she worked with at Drax where he was group treasurer. The two have now teamed up to launch Dukes & King, a corporate finance and risk management firm, focussing on partnering, and “breaking the mould of the traditional consultancy approach”.
“Chris and I have a unique way of working with complementary differences. We go through a mutual “continual challenge” cycle through every process to help us achieve the optimal outcomes we all strive for. I feel the awards we have received are more of an acknowledgment of our approach to treasury and risk management,” says Dukes.
“For us it is less about just going through the day-to-day motions, and more about looking at the specific business needs, future scanning for growth or change cycles, and then trying to map that to the relevant financial markets in a bespoke, tailored way. While this may drive some perceived complexity, we feel it is the most appropriate way to holistically manage risk.”
For Dukes, treasury is far more than just cash management and operations. “It’s about being an enabler for the company and its wider strategy, creating value whilst managing risk. We like to think that our positive challenging ethos is contagious, encouraging other stakeholders in projects to be more open and imaginative themselves whether that be the banks, insurers or other colleagues.
“Obviously, as a treasurer it is crucial to deliver on the basics, but it is also vital to be in a position to create risk adjusted added value in targeted, imaginative ways.”
Dukes and King launched their eponymously named venture in June. Dukes says its mission is to roll out to others the same innovative, value enhancing approach to tackling corporate finance and risk management the two have deployed successfully over many years.
“Our emphasis is on long-term partnerships rather than being an advisor or consultant people just use ad hoc. It’s about being that valued outsourced treasury expertise for people looking to proactively manage risk.”
Dukes’ view is that, ultimately, every company needs a treasurer, and that every treasurer has their own strengths and areas of focus. Over the years she has seen areas of specialism develop within the treasury profession so that increasingly nowadays treasurers move to secure specific expertise as and when required. It’s a trend Dukes & King is looking to tap into.
She is also keen, however, for the venture to help push the treasury profession to new heights: “Not enough people understand what treasurers do. Too many think we just manage bank accounts. By emphasising strategy and driving risk adjusted value I’d like to really challenge those kinds of misconceptions.”
Dukes has felt “really humbled” by the response to the launch of Dukes & King from her network and extended colleagues in banks and companies. “They’ve been very supportive and encouraging, wanting to see how not only they can help us but how we can help them. There’s a number of treasurers for example that have all already reached out and said it’s a really good idea, and that when suitable projects come up, they’ll be straight in touch!
“As ever though, the proof is in the pudding. We’re already working on some leads and projects and given the early very positive trajectory, we are confident it will be a success.”
Cutting to the chase
Mulling over the myriad of challenges currently confronting treasurers Dukes, typically, cuts to the chase: “There are a few obvious topical ones right now relating to macro and the stresses that may have caused them, such as Covid, Ukraine and supply chain disruption. For treasurers, dealing with such challenges generally boils down to how best to manage risk efficiently and remain focused on strategy and driving value regardless of whether it’s debt capital markets, liquidity, cash and so forth.”
“Markets rarely stay the same for too long. It’s always going to be about what is coming next. There’s always a risk to manage, an opportunity to manoeuvre for. The overarching task for treasurers, therefore, is to have those frameworks and toolkits ready to be set-up to move quickly.
“Build strength in your structures, including team, capital structure, financing and derivatives structures, so that you do not find yourself in a weak or back footed position should markets move against you. That requires extensive forward planning, and lots of healthy debate! That’s what matters.”
Treasurers have barely had a moment to pause and take breath over the last 2-3 years and considering the uncertain near-term macro and geopolitical outlook, there won’t be any respite for them any time soon.
Right now though, Dukes says it is the action on markets that is the key one for treasurers. “They are moving very rapidly, breaking all norms. The challenge for us is to think on our feet, constantly scan the markets, be proactive on risks, while keeping an eye out for business growth opportunities and potentially longer-term developments such as CBDCs and stablecoins that could have a far-reaching impact on operations,” she says.
Recently, concern has been expressed that many of the treasurers of today are struggling to cope with the dramatically changing operating environment, exemplified by inflation at 40-year highs and central banks across the globe on an aggressive rate hiking cycle. Indeed, there are signs of a pickup in CPD demand as younger treasurers look to brush their skills for managing in such an environment.
As a treasurer, Dukes enjoys battling against multiple headwinds but appreciates not all her peers are quite so enthusiastic: “I love fresh challenges, but lots of people fear what’s coming next, they worry about not having that rule book, not having that status quo to rely on.”
She is circumspect about treasurers resorting to old textbooks, theories and “how to” manuals to help them figure out how to manage in a dramatically changed operating environment: “There is a danger of people going back to the classrooms when we perhaps haven’t had time to rewrite those textbooks and manuals. Are those theories right for now I wonder?”
“As treasurers we should really be challenging the status quo and looking to what the policies of the future need to be rather than relying on the theories of the past. I hope as a profession, we don’t just fall back on Treasury 101 and instead build on those established principles, develop them in context for the new world that we live in.
“There is a definite mix of reactions to the challenges amongst treasurers and others I speak to in organisations. There are those who are ready to embrace them, but also those who are apprehensive. To the latter I can only say if you close your eyes to risks you will not see them coming, you won’t have time to prepare, giving potentially pretty dire outcomes.”
“When the economy becomes very challenging, across multiple markets, as is the case now, it requires even more active risk management and innovation. In such testing circumstances, there is often a greater need for creativity to better manage risks.”
In defence of banks
Banks play a vital role is supporting treasurers but it would be fair to say that treasurers’ trust in them could be better after a long period of steady erosion. Dukes, though, has a different characterisation of banks.
“I see banks as partners and part of the extended team. It’s about the networks internally as well as externally and getting that balance right breeds success. Not all banks are the same, and even within them it can vary quite a lot.
“It is the treasurer’s job to know the bank’s expertise, and not only select the best bank or set of banks for each need, but also consider how to work collegiately with institutions so that the partnership works them in the long run too. Both parties should know exactly where they are coming from and have the options to get the right place. There are not there just to make money”
Undiscovered FX gem
The drive and imagination Dukes has shown over her career has not gone unnoticed. In early 2020 she was invited to join the FX Joint Standing Committee (FXJSC), which is chaired by the Bank of England and acts as a forum for market participants, financial infrastructure providers and public authorities to discuss issues relating to the functioning of the wholesale foreign exchange market in the UK.
Earlier this year Dukes was also asked to be the UK private sector representative on the global equivalent of the FXJSC, the Global Foreign Exchange Committee. “The aim of both these committees is to promote fair open and transparent FX markets and I am very happy to contribute to that endeavour – it’s an honour to be invited to do so.”
One of the main aims for the two FX committees is promoting the FX Global Code of Conduct. I confess to Dukes that I hadn’t heard of the code or the committees before. “Not many people have unfortunately,” she replies, sighing. “We only have around two dozen corporates globally who have public signed a statement of commitment to the FX Code which really is staggeringly low.
“What I would really like to do as part of my role on the committees is encourage the wider markets, but especially my fellow treasurers and corporate colleagues, to understand the committees’ work and the benefits of the FX Global Code. The code is actually a solid tool treasurers can embed within their policies. It’s a one stop shop if you like for FX governance, a gem people don’t realise is out there.”
Dukes originally qualified as an accountant but quickly decided life as an auditor wasn’t for her and sought out instead more “niche and interesting roles” across finance and M&A, eventually moving to the Cayman Islands very early in her career in 2006 to focus on captive insurance.
“I enjoyed my time in the Caymans – who wouldn’t? I gained exposure to financial management and treasury, met people of different nationalities, and scooted about on a bright pink Vespa wearing flip flops. It was an interesting start to my career.”
The Caymans provided her first exposure to treasury, inspiring her to subsequently pursue roles with elements of treasury to gain further experience and knowledge. “I became really hooked and eventually settled on pure corporate finance and treasury roles, where I’ve been ever since,” she says.
Casting her mind back to those early years in the Caymans and mulling the single most important bit of advice she might, with hindsight, give to the younger Lisa, Dukes immediately plumps for “pursue what you enjoy”.
“I am lucky enough, perhaps sadly so, to enjoy treasury and corporate finance very much indeed. If you have enjoyment and interest then you will have the enthusiasm and drive. You should never be bored at something, and if you are, then you need to rethink what you’re doing,” she says.
Dukes would also encourage her younger self to explore additional learning, formal or otherwise, whether it is risk management, accounting, or other specific treasury qualification.
“I am always thirsty for knowledge. I love comparing intelligence and analysis from a diverse range of sources. What I have found is that if you cross read like that, it can open up interesting ways of approaching problems. So never stop learning or exploring.
“And don’t ever be scared to speak up or challenge conventional wisdom, or be so afraid to be wrong that you feel unable to contribute. It is important to ensure alternative views are always considered – it’s the foundation for developing that lateral, collaborative approach needed for optimal outcomes. That said…. if you ask my two children, I’m never, ever wrong. I’ve got an answer for everything!” she says, chuckling.