Treasury Strategy & Transformation
Published  6 MIN READ
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How to Make a Treasury Committee Work

The treasury committee is often the cornerstone of any business. This is because it is often argued that disciplines within finance have many stakeholders and affect a variety of other functions. Therefore it is critical to bring the key stakeholders together so they can work in a collaborative way; a treasury committee achieves just that. Today, a treasurer is increasingly expected to be a communicator across an organisation. Doesn’t that fact alone highlight the need for a treasury committee?

If this is indeed the case, why then is treasury never invited to participate in committees for controllership, tax, financial planning, investor relations and other areas within finance? I have found such committees to be extremely rare, while a specific treasury committee is ubiquitous. Note that enterprise risk management is an exception to this, albeit outside of finance.

But back to basics and the fundamental question of where and how treasury adds value. With reference to the illustration of the value pyramid (see Figure 1) treasury is driven by corporate strategy, working towards implementing, executing and supporting the overall, long-term objectives of the firm. Complex operations and systems need to be continually maintained, explained and developed. Administration and settlement merely need to be cost-effective. Note that the value pyramid does not feature a treasury committee.

Committees’ effectiveness can be challenged when their members have varying levels of understanding and experience of the subject matter. The result is often a committee where the treasury professionals become impatient because the non-treasurers are reluctant to put their name to a decision due to insufficient understanding. To the non-treasurers’ minds, it is not the role of the committee to simply wave through anything proposed by treasury, but to challenge what is proposed and add value by providing input.