In the current trading environment, where companies really need to have both acute visibility over their financial assets, and the most effective plans to manage them, we ask if the time has finally come for the Chief Liquidity Officer.
Never heard of the Chief Liquidity Officer (CLO)? It’s not a C-suite moniker that has too many takers to date, so it’s not surprising if it has passed you by. But maybe it is time, given the volatile markets in which the world’s businesses operate, to dust off the idea, find a suitable incumbent, and send them into battle. Ideally, they would be armed with a new focus and authority to fortify corporate liquidity, bring about full cash visibility, and steer cash management from a central command position. It certainly sounds energising.
The CLO role first garnered public attention back in 2002 when Ellen Heffes, writing in Financial Executive magazine, suggested the title for treasurers of Fortune 1000 companies. It was later picked up by Jean-Luc Robert, CEO, Kyriba, in CFO magazine. He proposed that organisations should explore designating a CLO as “a single, authoritative point of accountability that oversees the life cycle of liquidity and reports to the CFO”. And he too thought that it was a made-to-measure step up for the corporate treasurer.
Robert’s main argument for creating a CLO is that the appointee would be invested with the authority and credibility of C-suite status, empowering the creation and execution of a truly holistic liquidity strategy. Equipped with the necessary resources, it would be possible for the CLO to drive improvements in forecasting, payments and working capital, with unhindered access to “the many levers” that can affect these activities.