My Life in Treasury: James Kelly, Pearson

When James Kelly is recruiting for his team, he looks for people who can “defend against risk, control the agenda and pounce on opportunities.” And his top tip for new finance professionals is to capitalise on their fresh perspective. “Be demanding,” he advises. “Plenty of bad processes survive simply because they aren’t challenged.”

How did you come into treasury and what attracted you to the profession?

I love problem solving, working with numbers and variety, and treasury offers me a good mix of these. I started in treasury after being asked to help with the accounting for Kingfisher plc’s derivative portfolio and found it really interesting. So, when a role came up in the treasury accounting team at Kingfisher, I was excited about moving from my consolidation accountancy role to take on a new challenge.

I was incredibly lucky in that my first role involved being part of a team that spent so much time coaching and developing people. Nick Feaviour (now Treasurer of CEVA logistics) made Group Treasurer in his early 30s and gave me the confidence that age need not be a barrier to progressing to the top jobs in treasury. He also helped me focus on the skills and behaviours I would need to progress.

Lynda Heywood (now at Tesco) taught me so much technically, from modelling how to handle projects successfully, managing time and the technical aspects of bonds and swaps.

As a result of these lessons, I try to create a collegiate atmosphere, where senior staff are generous with their time for development and where opportunity isn’t limited.

How has your career progressed through to the role that you hold today?

I subsequently moved to Sky, where my role was a little broader than treasury accounting, incorporating controls and some analysis. I worked with a shared service centre for the first time and learnt the importance of keeping things simple.

At about that stage I became a father for the first time, so I wanted to find a role closer to home, rather than travel three hours a day. I applied for a number of roles in West Sussex and was fortunate that Nigel Roberts (now of G4S) took a chance on me for a role as his deputy. Nigel is a brilliant man and brilliant to work for. He maintains a laser focus on what is important, employs strong people and provides the right balance of training and learning by doing – and sometimes learning from mistakes.

When Nigel left, I was given the opportunity to head up the team where I led a number of projects, refinancing and streamlining treasury operations.  I later moved to Associated British Ports, where I spent a year as Treasurer. This was my first role outside a listed company so it was interesting to work in an organisation where the shareholders are also on the Board of Directors. This post also gave me my first taste of insurance, which was really interesting, particularly as there are plenty of risks to manage around ports.

Finally, I joined Pearson two years ago where I look after Treasury and Insurance with a small team based in the UK and US. The business is focused on digital transformation of much of the portfolio, growing its digital businesses such as online university courses (OPM) and professional assessment (Vue) and simplifying the business to use common systems and data. In treasury we have played a part in this, following a well-defined capital allocation policy by simplifying our financing arrangements and ensuring we have a strong balance sheet to provide a sound financial basis for the transformation.

How have the demands and needs of treasury changed over the course of your career, and what particular skills does the role require today?

The fundamentals of the role haven’t changed, but the range of risk is much broader than before. The banking crisis of 2007-2008 highlighted the importance of trust within the financial system and increased the focus on dealing with strong, well rated counterparts. The experience undoubtedly heightened scepticism of the smooth operating of financial markets. This led to greater intervention and a much tougher valuation methodology for financial investments within company accounts as treasurers became experts in basic risk, CVA and DVA adjustments and, latterly, bank capital models.

Advances in internet shopping experiences also mean customer expectations are continually increasing. As a result, the customer experience is starting to play a larger part in risk management discussions. Online fraud tools, insurance response and payments accepted are just three areas where the balance between risk management, efficiency and customer experience has to be carefully handled.  

Finally, the role of the shared services centre model and process engineering has changed the way that we interact with the customer-facing business to focus more on underlying trends with basic information, such as payroll costs accessed via systems. Having central teams carrying out all transaction processing also means that adjustments can be more easily made across the global network reducing the communications cost.

As a result of these changes, the treasurer of today needs a wide range of technical, operational and commercial skills to be able to work effectively and, critically, strong communications and influencing capabilities. As head of a small technical function, resources are generally scarce, so it is important to be able to work with other teams to get things done!

What specific, or perhaps surprising, qualities do you look for when recruiting treasury personnel?

I see it as important, with the breadth of the treasury, to have a team with many talents. So, my approach to hiring is similar to that of a sports manager aiming to produce a team - with all the abilities to defend against risk, control the agenda and pounce on opportunities. I need a certain number of outstanding communicators, treasury and insurance technicians, and risk management, plus commercial experts. My team must be driven, curious, demanding and able to see the picture inside and outside of treasury.   

This means that when hiring I will look at the specific needs within the team and identify the two or three key traits that will enhance it. Then I aim to recruit people with exceptional skills, potential and/or experience in these areas, knowing that any gaps in other fields can either be covered elsewhere in the team or through training.

How important do you think a formal treasury education is, as opposed to (or as well as) more general finance or accountancy qualifications?

It is important that the team members are exposed to general finance, either through having people with a general finance background (me in my team’s case) or through secondment. This helps to understand our internal customer better and the accounting requirements for treasury, which play a significant role in the tactics of executing and hedging strategy. However, I doubt I would recruit a team entirely from an accounting background because of the need for a broad range of skills and experience.

I think formal treasury qualifications can provide the technical foundations required for a role within a treasury team. Some people acquire these skills without the formal courses and exams route and through experience, but for new staff to treasury, the qualifications can give a real boost to their knowledge and understanding. 

What about wider experience in the world of business. Is that valuable too?

The same approach applies to having broader business experience. It’s useful to have team members with some knowledge of wider business roles, or to bring people in for short periods to offer a different perspective. Treasury faces many different stakeholders and so the more of their perspectives that can be brought into the team, the better the service should be.

Based on your career so far, what would your advice be to finance professionals who are perhaps in their first treasury role?

Firstly, congratulations on joining the treasury world, you’re going to love it! Gain exposure to as many different projects and parts of the business as you can. Attend treasury classes and keep in touch with other students to build a network and learn from their experiences. Finally, don’t forget that your strength now is having a fresh perspective, so be demanding – plenty of bad processes survive simply because they aren’t challenged and have been done like that as long as people can remember. 

What would your ideal holiday be?

I’m a huge Francophile, so anywhere in France would be on my wish list, but I particularly love the South of France, with its fantastic summer weather, vineyards, rivers and beaches. For the last two summers my family has travelled to Languedoc-Roussillon near the Spanish border, where we’ve had tremendous fun – eating, drinking, kayaking, sunbathing and spending time together. My children are young, so it’s lovely to see the games they come up with and the fun they have splashing in fountains or making sandcastles.

What book have you read recently or what film have you seen recently that you would recommend, and why?

I recently re-read Catch-22 by Joseph Heller, which is probably my favourite book of all time – it is hilarious, sardonic and, at times, tragic. The writing is so clever, poking fun at the madness of war and can very much be seen as setting the tone for later satire such as Blackadder Goes Forth. It’s so influential that it gave the world the “catch-22” situation – the original premise being a rule outlined in the novel that effectively made it impossible to be excused the war draft on the grounds of insanity. For those who are interested, a TV miniseries based on the book and starring George Clooney will be screened on Channel 4 in the UK and Hulu in the US, in April or May.