The Golden Age of treasury?

Published: Jul 2015



Now in their eighth year of marking the pinnacle of treasury endeavour, Treasury Today’s Adam Smith Awards bring together some of the world’s most inspirational treasury teams to celebrate all that is worthy about this profession. There is much to celebrate as creativity continues to flourish in an environment that has seen tighter regulation and financial uncertainty unsettle the markets.

With the effort and ingenuity of its best practitioners steadying the course, today is arguably the ‘Golden Age’ of treasury. More regulation, more political and financial uncertainty and more risk make for a somewhat choppy ride. But for treasurers, seemingly limitless creativity, ever-increasing professionalisation and unprecedented levels of boardroom attentiveness have seen their stock rise to perhaps the highest ever level. The annual Treasury Today Adam Smith Awards is thus perfectly poised to capture the essence of this moment. For those who get to take home a coveted award it is rightfully seen as the embodiment of all they have achieved to date in their chosen profession.

Of course, industry recognition and appreciation of success have an enduring appeal. The Adam Smith Awards are more than just a pat on the back for a job well done. They are about recognising and sharing experiences amongst fellow practitioners from all levels of the profession. They are about forging camaraderie amongst a peer group that fully understands the challenges and pressures faced by each. And, ultimately, about raising standards to new levels, striving to deliver the most complete service, working with and for business colleagues in a world that is in a constant state of flux.

For this, the eighth year of the Adam Smith Awards, a record 210 nominations from 23 countries were submitted, spanning a broad spectrum of treasury activity in terms of size, industry sector and geography. The level of diversity, scope, depth and quality of these submissions never ceases to surprise as treasurers continue to push boundaries. All of this, of course, makes choosing the winners that much harder for the panel of judges. But with much consideration (and not a little anguish) the best of the best were selected across this year’s 17 categories.

To bring it into focus, the Adam Smith Awards Gala Presentation Lunch, held this year on 18th June, returned to the appropriate splendour of the City of London’s Plaisterers’ Hall. As one of the largest and finest livery halls in London, the venue served as the backdrop to what one attendee described as, “a truly important event for the treasurers present.”

For the third consecutive year, Bank of America Merrill Lynch supported the Awards. Jennifer Boussuge, the bank’s Head of Global Transaction Services EMEA, said that to be a truly successful treasurer takes courage and determination. “Simply talking the talk isn’t enough. Treasurers need to step outside their comfort zone and push boundaries. An effective treasury team can make all the difference between a company that simply survives and one that truly thrives.” This year she acknowledged that “the bar has been set very high.”

If proof were needed that the event encourages such progress, one of this year’s winners – the Microsoft team led by Anita Prasad, Jayna Bundy and Shreyas Kulkarni – scooped the inaugural Best Trade Solution Award, having forged their winning submission in the white heat of discussion at last year’s event (where Microsoft scooped a trio of awards and Prasad collected the Woman of the Year accolade).

“We then had a series of meetings here in London right after the Adam Smith Awards,” explained Prasad. “We followed up in Finland (home of Nokia) the following week, and a year later we are live with the programme. It was very inspiring for us and we are looking forward to inspiration this year.”

In the words of a winner…

Each category in the Adam Smith Awards has an outright Winner and Highly Commended Winner. The judging is monumentally difficult and nothing is clear cut except that all who progress thus far are exceptional treasury talents. Treasury Today will be presenting the individual case studies in detail as part of the 2015 Adam Smith Awards Yearbook. As a taster of what is included, here is a brief overview of selected category winners and how they stood out in an outstanding field.

Hyundai Capital America

Treasury Today’s Top Treasury Team

In recognition of those who have made the world of corporate treasury that much better, the Top Treasury Team Award is a highly coveted accolade. This year it was presented to Eric Senay, Vice President and Head of Treasury and Frank Boroch, Director Treasury Investor Relations from Hyundai Capital America (HCA).

Key elements of HCA treasury’s work include the diversification of funding channels to support business expansion, deepening of liquidity sources to soundly manage the inherent volatility in the business, de-risking of the balance sheet through sophisticated liability management, reduction of interest expenses through improved financial community management, optimisation of funding instruments, and enhancement of flexibility for the business to finance incremental asset classes. The bottom line of all this is that the company has reduced its reliance on bank credit lines, reduced bank charges, made significant cost savings, improved its credit rating, driven productivity gains, delivered process efficiencies, secured interest savings, and removed or mitigated risk. Quite an effort – and a substantial payback.

On being handed the award, Senay said it is “a validation of the core belief we all share that a successful treasury organisation must earn a seat at the table helping drive sustainable business growth.” To do this, his team “found the courage” to profoundly change the treasury function at HCA. “We did so by assembling and developing a team capable of playing both tactically and strategically.” Boroch added that the Award was “important recognition” of all the hard work and significant investment made by the company. “It is also another way for us to measure ourselves against our peers and know that we are on the right path.”

Intertek Group

Best Cash Management Solution

From a simple single country/single bank solution to multi-country/multi-bank solutions, the Award for Best Cash Management Solution is all-inclusive. This year’s winner, Intertek, is one of the very first European companies to be able to sweep cash from China to an account in the UK on a weekly basis. With Matthew Clarke, Group Treasurer, at the helm, the solution demonstrates an entirely new way of moving trapped cash out of China, made possible by recent changes in regulation. As part of the solution, Intertek is also one of the very first European companies to have an RMB tranche in its wider syndicated loan facility, allowing it to treat RMB just like other global currencies in its day-to-day treasury management.

“We embarked on the journey about five years ago,” said Clarke. On the way, a skilled team was brought together enabling the project to come to fruition. Clarke described receiving the award as “very satisfying to attain something that is best in class.” With a global treasury talent pool that is “extremely competitive,” he believes it will place Intertek at the forefront when recruiting new team members.


First Class Relationship Management

Previously this award category focused on core bank relationships but it has been expanded to incorporate any relationship managed by the treasury function, such as investor relations, employee relations, ratings agencies and procurement. Notwithstanding the wider remit, Merck’s Group Treasurer, Rando Bruns and his team submitted an entry that showed how well bank relationships can be managed. The submission described the goal of having all relationship banks participate in Merck’s financing in order to further strengthen their relationships, whilst at the same time avoiding any ‘elbow-mentality’ and competition amongst them for certain financing roles. A financing strategy was developed to have a fair share of the wallet and name recognition amongst the banking group.

The plan also ensured Merck had a highly transparent syndication and take-out financing process at all times. The roles for each bank in the acquisition financing as well as the take-out financings were determined by Merck prior to announcement and signing of the credit facility. As Bruns recalls, “we were able to do so as we had arranged regular market updates and hypothetical pitches by our banks in the 12 months prior to the acquisition financing and had a very good understanding of bank’s capabilities.”

The Adam Smith Award, he said, is “recognition of all the hard work and dedication we put into the project,” adding that it not only reflects the level of collaboration throughout the organisation but it also provides a means for treasury to show the rest of the company, which has built its reputation on creative research, that “we also can be innovative.”


Harnessing the Power of Technology

Technology inevitably becomes a key component in many of the submissions entered in other categories, but sometimes the intelligent use of technology becomes worthy of recognition in its own right. Honeywell’s Belgium-based treasury team, headed up by Séverine Le Blévennec, Director, EMEA Treasury, have created a unique solution that truly is a masterclass in Harnessing the Power of Technology. Their project integrates the best of several technologies with customisations to fit the company’s needs precisely.

“We think a lot about our strategy, our projects and the best way to use resources and this Award tells us we are going the right way,” said Le Blévennec. She described the project as “a long journey for a company the size and complexity of Honeywell,” but attributed its success to “vision, energy and control.” She believes that the Award will help Honeywell attract the best people to the business, demonstrating that it encourages employees “to challenge the status quo and make things change.” She added, that it also reinforces the view amongst senior management and the Board “that what we do makes sense.”

Health Care Service Corporation

Judges’ Choice

Creative and innovative treasury has been celebrated as part of the Judges’ Choice Award since 2012. With a remit to look for something just that little bit different, each year the Adam Smith Awards have shone the spotlight on one submission that shows more than just a little star quality. For this year, Health Care Service Corporation (HCSC) led by David Deranek, Senior Manager of Treasury Operations and Control, caught the panel’s attention.

Although HCSC submitted several entries in a number of categories, the judges felt the scale of projects undertaken warranted a most deserved winner as Judges’ Choice, given the manner in which the team had gone about responding to the challenges of the US Affordable Care Act (ACA – also known as ‘Obama Care’) that was passed into law in 2010 and came into effect in 2014.

The solution required a three-year transformational programme, which incorporated treasury process improvements spanning treasury operations – cash management, cash forecasting, investment management, corporate governance and audit controls, treasury systems architecture, balance sheet management, business continuity practices, and most importantly, staff development and enrichment.

The completeness of this treasury transformation project embodies best practice. It allowed HCSC to restructure the staff to emulate a centralised financial services model. This now serves as a treasury knowledge centre by assigning staff-resources to their business-partner teams, providing specialised levels of treasury talent and financial support to the organisation. With this pioneering spirit, 100% of the treasury team now is deployed to support the business enterprise.

“To win the Adam Smith Award is a tremendous honour; it validates the great work we’ve done within our corporation, especially among the peer group we are with today,” said Deranek. He described the hard work put in by the team, citing their collaborative effort as “the key to our success.” He added that the Adam Smith Award creates a positive “brand image” for HCSC’s treasury not just within the company but also with its vendor and banking partners.

Christine McCarthy, The Walt Disney Company

Woman of the Year 2015

In tandem with the Treasury Today Women in Treasury programme, the Treasury Today Adam Smith Awards’ Woman of the Year is open to any woman operating in the corporate treasury environment who demonstrates real innovation and achievement and who is seen as an inspiration in her current role. Christine McCarthy, Senior EVP and Chief Financial Officer, The Walt Disney Company, delivers on all criteria. Describing her award as “a privilege and an honour,” McCarthy says personal achievement comes from “integrity, hard work, dedication and being able to take opportunities whenever they present themselves.” On a professional level, she feels success becomes very much a matter of building a strong team, something which she has clearly achieved.

She also believes that at certain points in an individual’s personal and professional life it is essential to “give back what you can, when you can.” McCarthy places great importance in mentoring and motivating younger colleagues, particularly but not exclusively women. She is also committed to reaching out to those still on the path of education. In this respect she offers her support to the STEM programme which encourages and develops school-age talent in science, technology, engineering and maths. She is the consummate professional.

The Golden Age?

This is just a small sample of some of the success stories heard as part of the 2015 Adam Smith Awards. In the final analysis, in spite of – or perhaps because of – continuing issues around regulation, financial uncertainty and all manner of risk, treasurers have clearly risen to the challenge. Some of their solutions, whether tackled in-house or in partnership with banks, vendors or consultants, are ingenious and will outlive any such market turmoil. So is this is the Golden Age of treasury? If it is, treasurers will not be content to rest on their laurels. As each year’s Adam Smith Awards event comes around and the panel of judges are presented with the unenviable task of selecting winners, it is obvious that this is one profession that is constantly on the hunt for the next improvement.

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