Fulvio Barbuio, Head Corporate Treasury & Risk at Australian Broadcasting Corporation, has seen many changes in his 30 plus years working in finance and treasury. The biggest of these being the evolution treasury has undergone since the global financial crisis (GFC). Here, Barbuio outlines his views on this transition and offers his advice on what treasury should focus on to ensure that it maintains its strategic mandate.

The corporate workplace has provided an excellent setting for many of the world’s best TV shows. Mad Men, for instance, is set in the high-pressure world of a 1970s media agency, while The Office proved a hit comedy with its light-hearted look at the modern workplace. But, there are none that focus on the treasury function.

Yet the profession has a great story to tell, having evolved from finance into a discrete function in its own right. The role has since expanded beyond the back office and into the forefront of the business, seeing treasurers around the world become trusted and strategic advisors to the board.

Having played a key role and also been a keen observer of this evolution, Fulvio Barbuio, Head Corporate Treasury & Risk at Australian Broadcasting Corporation (ABC), has seen plenty of change in his time working in the profession. And he is of the view that there is still more that treasury can, and may have to do, in order to ensure it maintains and expands its strategic mandate.

Making an impact

It was this opportunity to be more strategic and add value to the business which first attracted Barbuio to the treasury profession – although fate certainly helped push him in this direction as well. “My first role after graduation was as a financial accountant,” he explains. “By chance they needed somebody to undertake treasury duties as well. The role also required me to report on Australian economic, corporate and political matters for the head office. So together that gave me a broader view and appreciation of corporate activity beyond that of a traditional accounting job.”

With this solid foundation in place, Barbuio then looked to obtain a wealth of experience by working in various corporate finance and treasury roles, as well as trying his hand at planning, business development, strategic planning, and supporting financial pricing in a sales team – or “working at the coal face,” as he describes it. His career has also spanned a number of industries, including mining, energy, technology, utilities and media, in both the public and private sector.

“I have had a broad financial career as a result,” he says. “But treasury has always been the mainstay. The extensive nature of the role with its internal and external relationships, engagement with fast moving financial markets and having a helicopter view of financial risk and how that can impact business value, have combined for a varied, interesting and satisfying career.”

Somewhere on the strategic journey

Whilst the treasury profession had always proved an interesting challenge to Barbuio, it wasn’t until the global finance crisis (GFC) of 2008 that the function truly stepped out of the shadows. “The focus on liquidly since the GFC has generally moved treasury a little closer to the ‘main tent’ given that senior management and the board saw this area as crucial for riding out the financial storm,” he says. “This highlighted the need for a sound liquidity management policy and framework to fund business opportunities and growth in the most cost effective, sustainable and financially responsible manner.”

More recently, Barbuio has seen the greater volatility in the markets further elevate the risks posed to businesses, requiring an even better management of liquidity and risks for which treasury has played an important role. “In numerous areas, treasurers have had to step up and promote their cause and abilities.”

That being said, not all organisations have moved at the same pace and from his position as a member of the board at the Finance and Treasury Association in Australia, Barbuio sees treasuries at different points on the strategic journey.

“The strategic penetration of treasury has certainly not been universal,” he says. “And in Australia there remain companies that still view treasury as a back office function.” He believes there are numerous reasons for this: “This is typically driven by a mixture of the size of the corporation, its complexity and geographical spread (those with operations offshore may tend to be more strategic), the treasury ‘awareness’ of senior management and the board and also the attitude and skill of the treasurer to deliver value and sell themselves.”

Building trusted relationships

However, for Barbuio, no matter how well develop the treasury is, there are always opportunities to add more value to the organisation. He highlights large-scale transactions, such as M&As, as being a prime example of this. “In situations such as these treasury can put its hand up and act as a financial advisor to the M&A team – thus going above and beyond and offering added-value.”

Nonetheless, these transactions are not everyday events and Barbuio stresses that treasurers need to find ways to add visible day-to-day value. “I believe treasury should help the various business units in the organisation achieve their objectives by funding their activities, managing their financial risks and supporting their customers and suppliers.”

In numerous areas, treasurers have had to step up and promote their cause and abilities.

But, speaking from experience, he understands that this takes time. “To be successful, treasury needs to gain an intimate understanding of the different business units and their pressure points. Only then can treasury begin building solutions to help them be more successful in meeting their aims and objectives.”

And at the heart of this lies communication and relationship building. “To be an effective strategic treasury there is a requirement to build strong, respectful and trusting relationships with key business managers,” he says. “This shouldn’t just be the treasurer’s responsibility, but the whole treasury team. This provides multiple touch points with the business and enables problems to be solved with the knowledge and knowhow of treasury.” As an example of this, in his own organisation treasury staff are encouraged to work with project managers to help identify FX exposures and how best to handle them be it by way of better contract terms and conditions or through financial market solutions.

Measuring the strategic value of treasury

To guarantee that its work is fully appreciated Barbuio has learnt that treasury needs to ensure senior management and the board are fully aware of the value it is having across the organisation. To do this, Barbuio has looked to quantify this value-add into information that is meaningful for the senior management and the board. This helps avoid talking in the abstract and gives senior management and the board something tangible by which to measure the value treasury is adding. But, he issues caution in respect to what metrics treasurers use.

“Treasury should be benchmarking itself on a regular basis by using traditional metrics and comparing its performance against external benchmarks or internal targets for funding costs, investment returns or risk mitigation,” he says. “This can be done within themes, which is my approach, such as, liquidity, investments, funding, financial risk management, operational risk and adherence to treasury policies.

“Treasury can also attest to the efficient and controlled running of its operations through treasury specific metrics around throughputs and the application of appropriate controls. This is again something that myself and my colleagues in our shared services centre do regularly,” he adds.

But from Barbuio’s experience, he has recognised that these areas, while important for treasury, do not typically speak the same language as senior management and the board. Treasury may therefore be better served translating the financial value it has added, or plans to add, into what this means for past and future cash flows. In doing so, treasury will be speaking about the key determinant of enterprise value and the impact its actions are having directly on shareholder value – one of the key concerns for the board.

“The mindset of treasury needs to pivot towards this paradigm and should use the tools and concepts available to it as a means of delivering enterprise or strategic value,” he says. “Of course some of the activities of treasury will have more direct cash flow effects than others. I have learnt that it is up to the treasurer to skilfully draw these less obvious linkages for senior management and the board to appreciate.”

Evolving external relationships

The evolving role of the corporate treasury has, in Barbuio’s opinion, forced the entire ecosystem around treasury to change also – in particular the banks. “As treasurers have become more involved in assisting business operations in areas once not universally in their privy, such as shared services and working capital management, banks have had to react to this and provide more related services and solutions than in the past,” he says.

As a result, he has seen the need for banks to continuously step up their liquidity and cash management services. “The relationships have morphed towards more partnerships on an operational level in which the parties are more intertwined,” he says. “For me it’s about banks delivering the core services I need at a competitive price and then for them to know my business and put forward options and opportunities to help me solve business problems. The challenge for banks is in keeping pace with the demand and change and not ceding this to the growing fintech sector.”

Yet, for Barbuio, the responsibility to maintain this relationship doesn’t just lie at the feet of the banks; it is a two-way street. “I look for my treasury operation to maintain an excellent profile and relationships with all our core banking panel,” he says. “There is a need for treasury to deliver a share of wallet that allows these banks to fairly participate in our business while maintaining that competitive tension.”

Technology providing a strategic advantage

As well as leveraging banks as strategic partners, Barbuio and many of his peers in Australia have also invested in cutting edge treasury technology to further help them on the strategic journey. He has seen this enable treasuries to transition from focusing on repetitive, mundane and voluminous work to more analytical, strategic, partnering activities higher up the value chain. “Technology will both facilitate efficiencies and improve the quality, accuracy and value derived from core activities and data, while at the same time allowing for higher value-adding initiatives to claim some of the resources and limelight. This will, in my view, add to the vibrancy, status and satisfaction of the treasury profession.”

But technology can only go so far and, to become truly strategic, a treasury must invest in its people. “The application of strategic value add, while assisted by technology requires smart, business attuned, treasury skilled and confident people to create and sustain the business relationships needed to be seen as business partners and problem solvers,” he says.

Even the technology itself, in his view, requires the human touch. “While technology may be an enabler to becoming more strategic in focus, there are perennial issues which treasury faces around getting the core settings right, such as achieving visibility over cash flows and exposure forecasts from the business,” notes Barbuio. In his view, these again show the need for relationships between treasury and the business – without it technology may not be as effective as it should be.

In fact, good soft skills are often required to ensure that treasury even gets the technology that it needs. This is particularly true today with innovation being made across the broad spectrum of business operations seeing different functions competing for resources. “In my experience, to win resources treasury needs to ensure that it understands the strategic context it operates in and identifies the value that it can bring to this strategic context,” he says. “It goes without saying that it should also focus on flawless execution of mandatory treasury activities. These are the key components to having a shot at securing the resources needed to play a leading role in the organisation.”

Strategic aspirations

And for those looking to build a successful career in the profession he has some sound words of advice. “First it is vital to ensure you have the core financial and treasury knowledge and to attain some professional financial and treasury qualifications,” he says. “These signify a level of expertise and experience that sets these specialised financial professionals apart from generalists practicing in treasury and while not universally mandated should be keenly sought after by CFOs.”

Joining a treasury group is also another way to ensure that professionals get access to further specialist knowledge through training and networking. In doing so, it may be possible to obtain a mentor which Barbuio believes can be a key ingredient in forging a successful career.

The final attribute that Barbuio believes is needed from a 21^st century treasurer is to have spent some working in an operational role. “This may be as a financial advisor or business advisor,” he explains. “But the key point is to get that coal face experience and this will help in relationship building and developing commercial acumen. I encourage my staff in this respect and ask them to take the lead in communications with the business to ensure they create strong and trusting relationships so that they get the information they need at the level of quality that they require,” he says.

“If you do these things it will help you achieve the goal of not only becoming a treasurer but a strategic treasurer,” he concludes.

The opinions of the author are his own and do not represent those of the Australian Broadcasting Corporation.