Redefining the Role of the Treasurer

Treasury’s strategic role continues to expand as it takes on more responsibilities, collaborates with an increasing array of business units, advises senior management and becomes heavily involved in making capital allocation decisions. Treasurers’ skill sets are increasingly in demand to provide analytical rigor and advise corporate leaders and boards of directors on how to best optimize corporate liquidity and ensure holistic risk management.

To meet growing demands for their time and advice, treasurers have to ensure highly effective and efficient treasury operations in order to fulfill their traditional roles while also meeting the requirements of the “new” treasurer. We believe the companies that embrace this transition into a broader role for treasury and take advantage of treasury’s analytical and risk management capabilities will have an opportunity to make better strategic decisions in an increasingly uncertain business environment.

Key Highlights from Survey

The 2014 Strategic Role of Treasury Survey (published by the Association for Financial Professionals in collaboration with Oliver Wyman) captured the views of senior treasury professionals in March 2014 on their changing role and Treasury’ s current and future focus. Key findings are highlighted below.

1What is Strategic Role of Treasury survey?

The role of Treasury continues to expand and the function is increasingly playing a more central role in corporate decision-making and in defining risk-adjusted strategies. This study identifies the implications of this higher-profile role for a treasurer and what is needed to be effective in this new role. The Association for Financial Professionals and Oliver Wyman collaborated on this survey that captured the response of 243 senior treasury professionals in the industry.
2What are some of the key findings of this year’s report?

The survey findings reveal that the role of the Corporate Treasurer has fundamentally and irrevocably transformed from the traditional back office focused function to one that is significantly more visible and highly strategic. 84% financial professionals report that Treasury is playing a more strategic role with 83% of the respondents anticipating a further growth in treasury’s role in the next years.
3What has been causing the evolution in the role of the treasurer in companies?

The role of the corporate treasurer has been evolving slowly over the past decade but this accelerated dramatically since the financial crisis. Increased focus by corporate leaders and boards of directors on liquidity; risk identification and management; and optimization of the use of cash on their companies’ balance sheets are the primary reasons for the shifting role of treasurers in companies.
4What makes treasurers suitable for handling this transformation?

Treasurers’ analytical skills sets, understanding of global markets and corporate-wide insights put them in an ideal position to help their company critically evaluate and optimize their various strategic options. In fact, more than ever, corporations are focusing their decision making on risk-adjusted strategies and effective balance sheet management.
5What are the challenges that treasurers face in handling this shift?

Treasurers are now providing increased strategic input. At the same time, their traditional role remains critical. Day-to-day treasury management is an intensive and critical function requiring flawless execution across a broad spectrum of activities. To meet the dual (and sometimes conflicting) requirements, with continued lean staffing numbers, it is important for the function to identify opportunities to automate, standardize and streamline its daily operations.