New data from the Association of Corporate Treasurers (ACT) finds that treasurers in 2014 are working significantly more on risk management, indicating a broad shift toward a more strategic role played by corporate treasurers in business.
66% of corporate treasurers surveyed by the ACT in The Contemporary Treasurer: 2014 identify risk management expertise (including FX, commodity, operational and business risks, among others) as the most important competency for a treasurer today.
The survey also reveals that on average, over half (51%) of a treasurer’s time is now spent on issues concerning the international trading activities of their businesses rather than domestic issues. Treasurers of internationally-focussed businesses are likely to play a more strategic role.
Chief executive of the ACT Colin Tyler believes boardrooms are beginning to understand the value of consulting treasurers on matters of strategy as companies look to return to growth following the financial crisis. “It’s no surprise that the whole risk aspect is increasingly important,” he tells GTR.
“Treasurers have always been risk managers, but there’s been a progressive change towards the strategic role of the treasurer. The worries of board members wax and wane, but after the financial crisis, I doubt there’s been a board in the world that hasn’t asked their financial team: ‘Do we have enough money to stay in business?’”
“When the economic environment tells you to ‘batten down the hatches’, it’s easy for business to achieve sterility when the aim is stability. Treasuries have become greater advocates of taking opportunities whilst managing risk, whereas boards have been more cautionary,” he adds.
The survey also finds a skills shortage among young treasurers in the area of international trade. Older, more experienced, treasury professionals tend to deal with the financial issues that come with cross-border activity.
“It’s markedly different to go from a domestic business to an exporting one,” explains Tyler. “All of a sudden you’re talking about managing FX risks, counterparty risks and the legal aspects of dealing with a company in a foreign jurisdiction.”