Strategic Treasury

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PwCs Global Corporate Treasury Survey 2014 The financial crisis transformed the role and responsibilities of treasury, and gave textbook concepts like counterparty, systemic and liquidity risk a real face and put them and therefore the critical role of treasury into the spotlight.

PwC’s Global Corporate Treasury Survey 2014

PwC's Global Corporate Treasury Survey 2014

The Evolution of Treasury: From Department to Enterprise-Wide Process

by Bas Rebel, Senior Director, Corporate Treasury Solutions, PwC Netherlands and Nick Axton, Senior Manager, Corporate Treasury Solutions, PwC UK

The role and responsibilities of treasury beyond the departmental wall have been transformed since the financial crisis. The crisis gave textbook concepts like counterparty, systemic and liquidity risk a real face and put them – and therefore the critical role of treasury – into the spotlight.

The direct crisis management actions that treasurers took in the months after the crisis have now been replaced with a focus on long-term solutions, transforming the treasurers’ role further.

Treasurers are taking on more responsibility through effective business partnering outside their department, and many now have a role in working capital management, operational payment processing and commodity risk management. We now see treasurers exploring their expanding role in core business, both centrally and regionally, and thinking about its implications.

This summer, we conducted an in-depth survey with 110 treasury teams around the world. The results show a sharp contrast to our last survey in 2010 and clearly illustrate the impact of the aftermath of the 2008 financial crisis and how it has changed treasury for years to come. While our survey in 2010 highlighted that many treasurers were still dealing with the crisis itself, we now see treasurers working on sustainable solutions emerging from the stepped up demands and constraints set directly or indirectly by internal and external stakeholders (Figure 1).

Figure 1
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Pressure points

Arguably, the biggest claim on today’s treasury agenda is made by senior management. We live in a more risky and volatile world and senior management is held more accountable than ever by shareholders and society for the profitability, ethics and sustainability of their companies. As a result, they demand more frequent, detailed, flexible and accurate information on cash, cash-flow and financial exposures from treasury to support decision making and stakeholder management. This places pressure on the treasurer to free up resource, build capabilities and use systems to enable efficient processing.

Senior management is also pruning the company’s business portfolios and requires treasury to be able to easily integrate new business and carve out existing business. As a result, treasury teams need to be agile and adapt to new demands, often in new or unknown markets.

Figure 2
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C-level typically has a relative higher priority on non-traditional treasury topics than treasurers (Figure 2). Tax issues, working capital management and commodities rank higher with the CFO than with the treasurer but may point to specific roles and responsibilities.

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