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Treasury as Value Creator in a Decentralised Company

by Laurent Hendrickx, European Treasurer, Guardian Industries Corp.

Managing treasury in a decentralised business environment is an entirely different proposition than in a business where management responsibility and business support functions are concentrated at regional or global level. Coming to Guardian from my predecessor company was quite a culture shock. While my previous company is predominantly a marketing-driven organisation, which typically creates a more centralised culture, Guardian has emphasised local responsibility and therefore is far more decentralised in its culture. This article shares some of my experiences of managing an efficient treasury operation in a decentralised business environment.

Right and wrong?

All banking relationships are maintained by treasury, with no need to establish local communication channels, except for payroll.

As treasurers are constantly striving to centralise cash and business processes in order to create more visibility and control, there is a common perception that a centralisation is the ‘right’ business model, and therefore, a decentralised approach must be ‘wrong’. For example, at my former company, the headquarters functions were strong, and shared service centres (SSCs) operated very efficiently. Guardian is more of a sales-driven organisation, with more responsibility and accountability held by  local sales and business management teams. Bearing in mind the nature of our products, this business organisation creates significant advantage for the company. For example, it is difficult and expensive to transport glass-related products, so it is important to operate close to our customers. Furthermore, it is difficult to sell our products into volatile markets, so we need to remain in touch with local situations and maintain flexibility in our approach.

Consequently, while from an organisation and business management perspective, a decentralised structure is undoubtedly the ‘right’ one for a company with Guardian’s profile, it creates considerable challenges for treasury. Firstly, the role of the treasurer is perceived quite differently inside such a structure. In a centralised organisation, the treasurer can set policies across the business relatively independently; in a decentralised operation, however, this role is effectively reversed, and treasury is seen much more as a service provider to the operations.