Patrick Verspecht, Experienced Treasury Professional
In this edition, Helen Sanders, Editor, talks to Patrick Verspecht who has enjoyed a long career at Dresser Industries, Halliburton and GE. After more than 35 years in the IT and treasury professions, Patrick talks about his career and emphasises the importance of retaining experience in treasury.
How did you come into treasury and what attracted you to the profession?
I have to say that my career is not a typical one. In short, I started as a computer operator and became the global treasurer for a €4bn business. Having originally planned to go into medicine, I left university after a year in 1978, qualified as a programmer and became a computer operator the following year at the EMEA headquarters of American multinational Dresser Industries Inc. During the 1980s, there was a big expansion in demand for IT resources, so I quickly became an analyst programmer, and, having gained a degree in IT through night school, by 1983, I was responsible for the suite of financial applications running on the mainframe. I worked in IT for Dresser for about 19 years, including a variety of positions in UK, France and Belgium, and working on internal projects in Italy, Holland and Germany. These roles involved spending time in both the corporate offices and at various manufacturing plants. These 19 years gave me an in-depth view of a multinational corporation, and as I mostly handled finance-related projects, I gained experience in accounting and finance, supplemented by three years of accounting courses at the Belgian Chamber of Accountants.
After nearly 20 years in IT, I was looking for a new challenge, and in the late 90s, I became UK Controller for the Valves division of Dresser, which had since been acquired by Halliburton. In 2001, Halliburton sold this division to private equity investors, and the ‘new’ Dresser was born, of which I was a part. One of my main tasks at that time was, in collaboration with the group treasurer, to be the primary contact for treasury in Europe.
How did your career progress through to the role that you hold today?
In 2004, I was promoted to the position of European treasurer, then quickly became treasurer for EMEA. In 2011, we were acquired by General Electric (GE), and I supported the integration of both the Dresser business, and Converteam, acquired from Alstom into the GE treasury organisation. I then became the global treasurer for part of the oil & gas segment of GE, a €4bn business known as GE Measurement and Control.
There was a remarkable difference between working for Dresser and GE. Dresser was a highly leveraged company, so I spent a great deal of time seeking time with banks, of which we had at least one in each country, to support our $2bn debt position. The situation at GE was quite different: whereas I had been the one knocking on banks’ doors at Dresser, the opposite applied at GE. Personally, I found the scenario at Dresser more rewarding, as I think treasurers can add more value in a more leveraged environment. When working for a company with large cash balances, the role of treasury becomes more operational and less strategically important.
I remained at GE until February 2016 when the position was made redundant, and although I was offered other treasury roles in the US, UK and Italy, I decided that after 37 years working for US multinationals, I wanted to seek for other challenges in the treasury management space. I am currently working with a Swiss advisory & fintech company, FinMetrics, that specialises in financial risk management.
When trying to get a position in the corporate treasury world, I realised that, even for relatively high level roles, many HR departments are looking for younger people, when in fact experience is a valuable asset in treasury.
How have demands and needs in terms of treasury changed over the course of your career, and what particular skills does it now require?
Few corporate treasurers will forget 15 September 2008 when Lehman Brothers collapsed. I was in a hotel room in New York, glued to Bloomberg TV, when our CFO called to ask for an accurate report of counterparty risk. While today this would take most treasury departments no more than a few hours, it was two or three days before we could provide something accurate. So today, while treasury is still focused on the traditional disciplines of cash management, funding and foreign exchange/ interest rate risk, counterparty risk management and compliance have emerged as additional areas of responsibility.
Tax is also moving higher up treasurers’ agenda, previously to manage issues associated with transfer pricing, and now to consider the implications of BEPS (base erosion and profit shifting). Technology is another key area of focus: in one respect, it helps treasury enormously, but it is still something to get to grips with, including emerging technologies such as blockchain.
I would say that today, the treasurer of a large company must be able to rely on a good team for the day-to-day tasks, but largely spend time developing internal and external partnerships: internally with the tax manager, the compliance officer, and a wide range of other departments within the company and externally with banks, fintech companies, vendors and service providers, treasury associations etc.[[[PAGE]]]
What is your greatest professional achievement to date and why?
I would highlight three treasury-related achievements and one more personal one. First was to contribute to win a $15m high margin contract with an Algerian customer by succeeding to issue a local bank guarantee within 24 hours during a weekend, on behalf of a Swedish entity not known by the issuing bank. Second was to successfully convince the group counterparty risk team and technical accounting experts to approve the use of one of the COFACE (credit insurance) instruments, which subsequently saved hundreds of thousands of US$ in hedging costs per year. It took between seven and eight months, but it was a great relief for everybody when finally accepted, as it minimised at a low cost the FX risk during the ITO (Inquiry to Order) phase of a project.
I am also very proud of the five awards I received during the last 30 months I spent at GE including ‘Hero of the Month’ awarded by GE Capital. This one recognised the development of a netting process as part of the internal cash pooling system, saving around $600,000 each year for the business I was treasurer for, a process that was subsequently rolled out more widely across the group.
From a personal point of view, I achieved an Executive Master in Finance from the Solvay Brussels School of Economics and Management in 2010-2011, at the age of 52. This had required a lot of effort and sacrifice by my family as well as me, but I had a huge sense of achievement on completing it. It was a terrific experience too, not least the fact that you live for ten months with your work group, which included six people from six different cultures and nationalities, and we still get together a few times a year.
What qualities do you look for when you are recruiting for your department?
I attach more importance to a candidate’s experience and personality rather than their academic background. In particular, I look for people I can respect and trust, as I need to be able to delegate responsibilities to my team members, and each team member needs to trust the others. Ethics and compliance is key for treasury, and therefore zero tolerance matters in my teams. I like people to be eager to learn, both about the business and wider changes in the treasury world, and to be dedicated to the business, with a focus on our customers.
How important do you think a formal treasury education is, as opposed to (or as well as) more general finance qualifications?
My first boss in treasury always told me that treasury is not finance. I believe this is true, even though treasury is becoming more closely integrated into finance, and you do not need to be a finance expert to be a good treasurer. You definitely require some finance background, of course, but most of the specific treasury expertise you need will come from work experience. Education and training from suppliers such as the ACT, TMI or EuroFinance can also help to fill the gaps or learn about specific topics.
Based on your career so far, what would your advice be to finance professionals who are perhaps in their first treasury role?
Change career if it’s not too late! No, I’m joking, of course. Treasury is a rewarding profession, but you need to remain humble. Treasury interacts with almost all other areas of the company, so you need to listen and learn from others, as well as educating others. When you join treasury, whether straight from university or from another function within the company, you need to stay aware of what’s happening inside the company, but also stay informed about what’s happening outside and in the markets.
Understanding the business should be ‘hands on’: if you are in an industrial valves business, for example, you need to know how to unmount and remount a valve, who your customers and suppliers are, and who your competitors are. You also need to set up your own network, again both inside and outside the company, including banks, peers, and providers of treasury solutions and services.
Last but not least, forget the 9.00am to 5.00pm working schedule. I work about 70 hours per week. This is at the expense of social life, and to some extent, family life. But it is impossible for a treasurer to work 38 hours a week and get everything done.
What would your ideal holiday be?
I have been lucky enough to travel a lot across four continents during the course of my career. China was my favourite place to visit, particularly the smaller cities. Travelling on business means you never get to spend much time anywhere though, so my dream is to spend a few weeks in China and in the Himalayas/Tibet region. But first, I need to lose a few kilos and to exercise...
