When first offered a job in treasury, Marc Vandiepenbeeck, Vice President & Assistant Treasurer at Johnson Controls, decided it wasn’t for him. Fifteen years later he is an integral part of one of the world’s top treasury teams with a wealth of treasury experience under his belt. Building on this success, Vandiepenbeeck has ambitions to develop in his role and beyond.
Vice President & Assistant Treasurer
Johnson Controls is a global diversified technology and multi-industrial leader serving customers in more than 150 countries. The company creates intelligent buildings, efficient energy solutions, integrated infrastructure and next generation transportation systems.
With his previous hobbies including racing cars and flying small planes, Marc Vandiepenbeeck, Vice President & Assistant Treasurer at Johnson Controls is not one to settle for the mundane. His desire to avoid the ordinary and take on new and exciting challenges is reflected in his career choices and his decision to carve out a stellar career working in corporate treasury.
It nearly didn’t happen, though. Discussing the formative years of his career in the early 2000s, Vandiepenbeeck admits that he had a plan for what he wanted his future to look like – a plan that didn’t include working in corporate treasury. “I was working at PwC in Belgium and the Johnson Controls treasury department was a big client of mine,” he says. “The treasurer at that time approached me on multiple occasions to see if I was interested in joining the team. But I kept saying no; it just wasn’t something that I wanted to do.”
For Vandiepenbeeck, the role of treasury didn’t offer the challenges nor the excitement that he was looking for in his career. “At that time liquidity was abundant and banks were falling over themselves to provide it,” he says. “Treasury, although an important function, simply had to find the cheapest source of funding and make sure the operation was running as smoothly as possible from a cash management perspective. It was all about penny-pinching, there was very little strategic input.”
Yet the chance to join the treasury department to work on a major M&A deal was an opportunity that Vandiepenbeeck couldn’t resist. In 2005 he joined Johnson Controls to work on the acquisition of York International. “It was an exciting opportunity and one that I couldn’t turn down as I had been looking for the chance to work on the inside of a big deal such as this for some time,” says Vandiepenbeeck. “It was a challenge with a lot of moving parts. I was required to develop an intimate understanding of the treasury processes of both companies and look at ways to optimise and upgrade these.”
Aside from being an interesting experience, the 18 months that Vandiepenbeeck spent in this role had a more important impact: they opened his eyes to the strategic importance of the treasury function. “I didn’t realise this before I began working in the department,” he says. “What I found most exciting was the potential for the role to develop and the chance to be at the forefront of this.”
“What came out of the crisis though was a tremendous amount of learning and a changed perception of the treasury leadership role.”
Little did he know this development would happen a lot quicker and more dramatically than he could ever imagine. “In 2007 I moved to Milwaukee to lead Johnson Controls’ capital market and investment activity,” he explains. “This was meant to be a short stint, but then the financial crisis happened.”
Vandiepenbeeck says that working in treasury throughout the financial crisis was “scary to say the least”. He notes that it was frightening to see experienced people with an intimate knowledge of the business concerned about how the company would make it through next day, let alone the entire crisis.
“Johnson Controls had significant exposure to cyclical automotive businesses and this created a great amount of risk,” explains Vandiepenbeeck. “We had large clients going bankrupt and closing down; it was very stressful and conditions were changing every day. There were just so many unknowns, which from a treasury perspective is a worrying scenario.
“What came out of the crisis though was a tremendous amount of learning and a changed perception of the treasury leadership role,” says Vandiepenbeeck. “Before companies would use the role as a transitional stop for finance leaders on rotation. The crisis highlighted that this was naïve and that companies needed a team of treasury professionals who understood the markets and also the business.”
After helping guide Johnson Controls through the crisis, Vandiepenbeeck stayed for another few years in Milwaukee looking after the capital market and investment activity for the company. But he knew that it was time to take on a new challenge: “I had worked through the crisis and all the challenges and excitement that came with it,” he says. “To then go back to issuing bonds in a normal market and under normal conditions wasn’t especially satisfying from a professional point of view.”
Vandiepenbeeck therefore jumped at the opportunity to move to Hong Kong to head up the Group’s Asia treasury centre in 2011. It was an appealing move not simply because of the chance to experience a new culture, but also because the company was investing heavily in the region and entering into numerous joint ventures (JVs) with local companies. “I knew this would provide a new challenge and that is what I was looking for,” says Vandiepenbeeck.
He admits that he was surprised, however, at how much of a challenge this was. “Working with companies that were part of a JV was not something I was used to,” he says. “And our JV partners often had completely different agendas to Johnson Controls, especially the state-owned companies in China, and this meant that I had to spend a lot of time talking to them and understanding their objectives and how these could align with our own.”
Although a challenge, Vandiepenbeeck says that he thoroughly enjoyed his time in Asia. “Hong Kong and China are rapidly changing from a regulatory and business standpoint so you have to be on your toes and ready to deal with the unexpected,” he says. “It is funny when I moved back to the US I really noticed the difference between east and west and did miss the fast-paced nature of Asia.”
It was in 2016, after spending four years in Asia, Vandiepenbeeck moved back to the US to assume his current role of Vice President & Assistant Treasurer at Johnson Controls. Again, the move was prompted by the desire to seek a new challenge.
In his current role, Vandiepenbeeck is once again responsible for leading the Group’s capital market, banking and investment management operations as well as the more traditional treasury operations in North America. He doesn’t feel like he is treading over old ground, however. “I moved back to the US because the company is undergoing a period of dramatic change,” says Vandiepenbeeck, referring to the selling of the Group’s facilities management business, the spin-off of its automotive division, the merger with Tyco and the signing of large JVs with Japanese and Chinese partners. “Treasury has a vital role to play in these deals, maintaining good processes and supporting the business.”
Most crucially, Vandiepenbeeck has learnt that it is important for treasury to keep costs under control. “In a dramatically changing environment like ours, a lot of unrealised costs can begin to emerge because you are busy working on the integration side of the deal, without taking a step back to look at the bigger picture,” he says.
Vandiepenbeeck uses the example of urgent high-value payments to highlight this. “During M&A, you often end up making lots of these urgent payments – which are costly – because the team has not been able to keep up with a deluge of work that has landed on their desk,” he explains. The remedy to this is strong treasury controls and central processes that help keep costs down. “It sounds basic, and in principle it is, but it is difficult to execute, especially in a changing environment,” says Vandiepenbeeck.
Open and frank discussions
Aside from locking down the treasury processes, Vandiepenbeeck notes that he has also been challenged when it comes to raising debt to finance these deals. “When a company is undergoing such a tremendous transformation, you need to make sure that your financing partners understand why this is happening and how it will benefit them to support the company in the long run,” he says. “I have therefore spent a lot of time in recent months speaking to the banks and investors about what we are doing. The key, I believe, is to be open and transparent and thankfully they have been very responsive to this approach.”
This open and transparent philosophy extends to broader dealing with Johnson Control’s banking group, something Vandiepenbeeck says ultimately benefits all parties. “Our treasury policy dictates that we put all parts of the treasury business out for tender every three to five years,” he explains. “This ensures that we keep the pricing honest, but more importantly it enables us to learn about any new products or developments that our current providers might not yet offer.”
Vandiepenbeeck also notes that the treasury is very careful in selecting the banks it works with, making sure that those who offer credit are rewarded with ancillary business. “We want to make sure that one bank doesn’t get a lot of our business without providing much credit in exchange,” he says. “It is about creating a relationship and partnership that is positive for both us and them.”
Vandiepenbeeck has also been spending a lot of time talking to his banks about the changing regulatory landscape, an area he admits is becoming more of a challenge. “Regulation has increased the cost of doing business and slowed down a lot of processes,” he says. “It has also created a lot more non-value adding work for the treasury team.”
That being said, his feelings about regulation are ambivalent: “You just have to accept it and make it work,” he says. “Thankfully these changes don’t just happen overnight and there is a lot of time to prepare. Our philosophy at Johnson Controls has been to just accept the changes and set up the right processes internally and use technology where possible to automate and alleviate the regulatory burden. Yes, this comes at some cost, but it is worthwhile in the long run.”
“Ensuring treasurers can focus on value-adding work will be a necessity if the role of corporate treasury is to continue to become more strategic.”
Striving to automate processes is something that Vandiepenbeeck is passionate about and Johnson Controls has been ahead of the technological curve. “We implemented SWIFTNet around ten years ago – we were one of the first companies to do this,” he says. “Since then we have also implemented a central treasury management system and electronic trading platform. We are now looking to leverage the developments in the trade finance space and digitise our work here.” For Vandiepenbeeck, the primary benefit of all this work is simple: it enables the treasury to operate with a lean team which is chiefly focused on value-adding work.
An eye on the future
Ensuring treasurers can focus on value-adding work will be a necessity if the role of corporate treasury is to continue to become more strategic. Vandiepenbeeck also believes that evolving market conditions will further boost the importance of treasury. He cites the rising rate environment as one example of this. “The cost of each investment dollar is going to become greater,” he says. “It is therefore vital that treasurers become closer to the business so that capital can be allocated efficiently and in a cost-effective manner.”
Treasurers must also keep a close eye on the broader macro-environment. Having worked through the crisis, Vandiepenbeeck is acutely aware that big macro-issues can easily be missed. “I think there are a lot of risks out there right now,” he says. “If you look at the price of certain assets, many of which are at record highs, there could be a bubble that is forming. The question is, what impact would a market correction have? It might be small and easy to swallow, or it might have ripple effects like in 2007. It is nearly impossible to measure or forecast until it unfolds. This is scary when you are managing a pool of assets and are responsible for the liquidity of the company.”
Moving on up
With all these risks and challenges to consider, Vandiepenbeeck unsurprisingly is still enjoying working in corporate treasury, especially the strategic side of the role. It does, of course, come with its stresses, but he has found a perfect tonic to this. “Spending time with my twin girls is the perfect way to unwind,” he says. “I am a morning person so I often don’t see them before I leave for work, but I make sure that I get home to see them in the evening. The little time I spend with them is more rewarding than anything else I can do in the day.”
Looking further ahead, Vandiepenbeeck has ambitions to branch out and take a broader leadership responsibility within the organisation. “I am a numbers guy and I love finance, but I want to be a finance leader as well and perhaps become CFO,” he concludes.