How Is The Role Of Corporate Treasurer Evolving?

How have external circumstances altered the role?


The Global Financial Crisis has changed much about the finance function. Few have had to adapt more to this new environment than the corporate treasurer. The crisis showed organizations how badly treasury management systems needed to be improved, and subsequently the treasurer’s role has taken on a new stature.

The 2014 AFP Strategic Role of Treasury Report revealed that whereas the job of corporate treasurer was previously more administratively inclined, they are now a far more visible presence within their organizations. They are increasingly relied upon to help cut costs and add value, often being heavily involved in the strategic decision making process and advising the CFO.

This shift in responsibility has been driven by a number of challenges, including the influx of regulations in response to the crisis, technological advances, and increased globalization. Treasurers are still required to complete their old tasks, however, controls, automation and reduced manual interaction have been enabled by mobile technology, shared service centres and straight through processing, among other advancements.

The corporate treasurer’s function is, at its core, to manage risk. This risk presents itself in a number of forms, and the priorities over the last several years have changed greatly.

The crisis brought to the fore a number of issues that needed to be addressed. The need for long-term committed relationship banks, and access to a diverse range of funding sources are central. One of the primary ways that the treasurer’s role has changed is the increased focus on both liquidity and counterparty risk. The crisis caused activity to increase around the centralization of liquidity, as treasurers attempted to mitigate future risk by moving cash into more accessible accounts. It also became apparent that the liquidity of everyone in their value chain was a relevant factor in gauging risk, as any breakdown - any missed payment - could have dramatic consequences. Counterparty risk is also of greater concern than before, as successive government bail outs highlighted the need to look at the credit rating of the bank in comparison to the corporate’s. According to the AFP report, 69% of those questioned believe that they will have an enhanced role due to greater emphasis being placed on cash management and liquidity.

The role of the treasurer is still growing in stature too. The recent AFP report showed that 37% say they spend over a quarter of their time leading their teams, and 83% anticipate further responsibilities over the next five years. In order to stay above water, they must ensure that they have the correct technology, skillset, and systems in place to deal with the challenges and increased responsibility.


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