Having initially turned down the opportunity to join a corporate treasury department, Marc Vandiepenbeeck, Vice President & Assistant Treasurer at Johnson Controls has gone on to forge an exciting career in the profession. Here he shares some of his thoughts on the evolution of the profession and what more can be done to push it forward.
When did you decide that you wanted to work in treasury?
I actually turned down the opportunity to work in treasury on numerous occasions in the early years of my career. I thought treasury was an important function, but that it didn’t offer the challenges nor the excitement I was looking for. From the outside looking in, it seemed to mostly revolve around penny-pinching and there was very little strategic input.
The chance to work as a member of the treasury team on a large M&A deal caught my attention though, as I always wanted to be part of such a project. I therefore joined Johnson Controls in 2005 to work on the acquisition of York International.
Working inside a treasury department on this project opened my eyes to the strategic importance of the function and the scope it had to develop further. I made the decision that I wanted to be at the forefront of this development and haven’t looked back since.
What was it like working in treasury during the financial crisis?
Scary. Johnson Controls had significant exposure to cyclical automotive businesses and this created a great amount of risk. It was frightening to see experienced people with an intimate knowledge of the business concerned about how the company would make it through to the next day, let alone the entire crisis. 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. 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.
What else is needed to make sure the profession continues to head in the right direction?
It is important that treasurers leverage new technology that automates processes, enabling treasury teams to focus their time on value-adding work. This will become a necessity if the role of corporate treasury is to continue to become more strategic.
Evolving market conditions will also provide treasury with a chance to boost its importance within the organisation. In a rising rate environment, the cost of each investment dollar is going to become greater. 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. Big macro-issues can easily be missed just as they were in the crisis and I think there are a lot of risks out there right now. 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 quite frightening when you are managing a pool of assets and are responsible for the liquidity of the company.
