Stepping up

It is not in the nature of Matthew Clarke to take the easy option. His career has been typified by throwing himself in at the deep end to ensure that he makes the most of every opportunity presented to him, the outcomes of which have been very rewarding.

Life is built from a series of different opportunities. These can come in various forms, some obvious, some more obscure and some simply from being in the right place at the right time. It is however, down to us to ensure that when these opportunities present themselves we are ready to take them with both hands.

It is this willingness to take full advantage of every opportunity that has defined the career of Matthew Clarke, Group Treasurer at Intertek. The result of this has seen Clarke’s career span multiple roles, in multiple countries, rising through the ranks to his current position.

Taking the initiative

As his rapid rise indicates, Clarke is certainly one to practice what he preaches. Following graduation from the Victoria University of Wellington in his native New Zealand, Clarke held accounting roles with Arthur Anderson and EY. “I had been studying accounting since high school as this is typically how early you had to start to qualify in New Zealand. Moving into public practice was therefore a natural progression,” he says.

Following four years at EY in New Zealand, Clarke took the big step to move away from his homeland and to the beautiful Atlantic island of Bermuda to work as an Audit Manager on the financial services side of the business. It was during this stint on the island that Clarke decided that he did not want to spend his entire career in public practice. “I began looking at different corporate roles which related to the skills I had developed and I was naturally drawn to corporate treasury,” he says. “It appealed to me then, and still does, because it is very commercial and it is more than just finance; you really need to understand the drivers and direction that the business is heading in. It also struck me as being a little different from the traditional career path of an auditor into a financial control role.”

With his heart set on a treasury role, Clarke began to do all he could to ensure he was ready and whilst working in Bermuda he used his spare time to study for the AMCT. “This was a challenge,” admits Clarke, “I didn’t have any specific treasury experience and there was nobody that could help me on the island – it was just me and my books.” Despite this Clarke was undeterred and passed the AMCT, opening the door into his first treasury role with mining company Kazakhmys in the UK.

“I began at Kazakhmys in an operational finance role working on monthly reporting, assisting with budgeting and conducting FP&A work for various divisions,” he explains. Being recently listed, Kazakhmys was still developing the head office corporate functions and didn’t have a treasury function in the traditional sense. “I knew that this would provide good treasury opportunities as the company progressed and a chance to put theory into practice.”

The big opportunity came along a year into the role when Kazakhmys moved into a net debt position through a large acquisition. The company brought in an interim treasurer to manage this process and Clarke worked closely with him to arrange the funding of the transaction, which included implementing a debut bank facility. “I used this as an opportunity to get as close to the project as possible and put myself forward to do all the ‘menial’ tasks, whilst at the same time learning all I could about the negotiation and documentation process,” he says.

The opportunity to learn didn’t stop there because following the acquisition the company set about building two new mines in Kazakhstan. “This was immediately post the financial crisis which made it very difficult and we were touring the world looking for funding.” Eventually the funding came from a non-traditional source, the China Development Bank. “Again this was a very interesting process to be involved in because there were few precedents to go on and large sums of money involved.”

Unfortunately, this would be the last big opportunity at Kazakhmys because once this process was complete it was clear that the focus for the company was on developing these mines. “The treasury challenges for me therefore didn’t look as exciting in the near term.” Yet, as one door closed another opened and Clarke quickly assumed a new role at Intertek – another treasury function in its formative years.

Striking a balance

Clarke spent the first 12 months at the company as Deputy Treasurer utilising many of the skills he learnt from his previous roles including: refinancing the company’s debt through establishing new bank facilities, arranging US private placement notes, diversifying the lending group and obtaining and then refinancing a bridge facility for another transformational acquisition. Having proved his worth through these projects, Clarke was rewarded with the role of Group Treasurer coinciding with his completion of the MCT programme and given the chance to build the Intertek treasury function.

“This was a fantastic opportunity,” says Clarke, “but the company had progressed well over the past few decades without a dedicated central treasury function. The various local subsidiaries therefore had a lot of ownership over their operations and the role of central finance previously was simply to support them.” This created a challenge for Clarke, as he explains: “It is vitally important that we strike the right balance between centralised and decentralised operations. We need to coordinate the liquidity and risk management across the Group from the centre but also maintain a strong relationship with the on the ground finance teams, given the vast geographical reach of the company.”

It is vitally important that we strike the right balance between centralised and decentralised operations. We need to coordinate the liquidity and risk management across the Group from the centre but also maintain a strong relationship with the on the ground finance teams given the vast geographical reach of the company.

Of course, building a treasury function is not a perfect science and, given the nature of the company, Clarke understands that there is a need for pragmatism in Intertek’s approach. “We had a few attempts at striking the right balance. For instance, at one point I looked at regional treasurers but, for many reasons, this didn’t work. What we have settled on, and what does work well, is having a specialist central team with appropriate systems to give visibility, backed up by the network of in-country finance managers acting as our eyes and ears on treasury matters on the ground.”

This approach also helps Clarke and his team manage the business nuances that come with operating in such a large amount of countries, especially the more complex emerging markets (EMs). “Many of the treasury themes across emerging markets are similar; a focus on documentation, a need for frequent regulatory approvals, and restrictions on domestic and foreign currency flows. Often my central team can bring our experience from other markets to assist with issues in a particular country. But, to be truly successful you also need local finance managers who thoroughly understand the detailed requirements of their particular country and can get things done; our finance managers are irreplaceable in this respect.”

Making the case

Ensuring that the treasury is offering value to the wider business is something that Clarke pays particular attention to given the age of the function. “As a new function we are still trying to demonstrate the value we can bring, this is a challenge that perhaps many other functions don’t have.” To do this, Clarke constructed a five year plan for the build of the treasury outlining a number of things it wanted to achieve:

• Centralise cash through physical sweeping and focusing on trapped cash in emerging markets.
• Improve visibility of FX risks and centralise FX risk management.
• Evolve the funding portfolio ensuring the Group had a balanced banking and debt investor group to support its continued growth.
• Assist with the wider finance transformation agenda through standardisation of cash collection and payment processes and efficient intercompany settlement.

Understanding that five years is a long time in business, Clarke was keen to ensure that the treasury also delivered milestones along the way that could be quickly met and communicated to the business. “I believed it was important to demonstrate that we were delivering incremental value while we strived for our five year goals. The cash management projects really helped with this as rationalising banking and standardising processes really helped deliver efficiencies for the local finance teams.”

Moving first

The youthfulness of the department and its desire to offer value to the wider business has also afforded Clarke the opportunity to be innovative and take bold steps. Take for example, Intertek’s Adam Smith Award winning solution in China that saw it implement one of the first cross-border RMB sweeping structures in the country. “The stars aligned in this case,” explains Clarke. “We had lots of cash that was tied up in the country (as much as £80m at one point) and once the opportunity to be part of a pilot scheme that would remove this challenge came along we couldn’t see any reason not to give it a go.”

While bold, the decision was pragmatic and calculated. “It was a pilot scheme being offered by the People’s Bank of China and they wanted corporates to be a part of it, so we couldn’t see any harm in being involved, particularly given the challenges we had.” The move proved effective and not only saw the team receive external recognition, helping promote themselves internally, it has also allowed them to drive further benefit by being more demanding, subsequently getting a group of their relationship banks to sign up to include RMB in a separate tranche of their latest revolver facility and thus provide an end-to-end RMB cash management solution. “This perhaps wouldn’t have been the case if we didn’t take the lead, because the second wave would have been dominated by companies much larger than ours and we perhaps wouldn’t have been able to obtain as much leverage.”

Pragmatism is key for Clarke however. “We are not in the business of taking unnecessary risks and we always consider new ideas and technology, but there is an extensive evaluation process that happens before we move.” A primary reason for this, as Clarke explains, is because the team at Intertek is not big enough to embark on a process of trial and error.

Getting the basics right

This is especially true at the present time given the recent market volatility as one of the key roles of the Intertek treasury team is managing currency risk. “Managing the market volatility is currently my biggest challenge,” says Clarke. “We have moved from a relatively benign currency environment to one that is much more volatile and we manage around 80 currencies across the Group.” Whilst there has been no need for dramatic changes, the approach to currency risk management has become more nuanced. “We have had to challenge some of the assumptions that we previously held and ensure we are protected against any sudden shifts,” he says.

During times such as these, the need for visibility is crucial and this is another area that Clarke has worked on. “Intertek’s rapid growth has meant we have a number of different ERP systems across the business which has made it challenging to obtain central visibility over our positions and exposures. We have invested in this space to ensure we can pull all these tools together and obtain data that we can analyse and turn into actionable business intelligence.”

Of course, in the digital age the options available to treasurers are abundant and Clarke is acutely aware of this. “To achieve the visibility we want and also to ensure we are utilising technology in the most optimum way, the question we currently have is, do we need one central system or a central system supplemented by ‘bolt on’ tools?” As Clarke explains, whilst a TMS is the core of the treasury operation and they are able to do most tasks a treasurer needs, the availability of bespoke tools for things such as FX analysis, FX dealing, cash visibility and forecasting may allow richer analysis and move efficient processing than what is possible from just using a TMS.

It is however an ongoing debate. “Balanced against the increased functionality of these bespoke tools is the need to maintain multiple interfaces as well as just keep the systems working. We are a small treasury team so by the time you allocate inputter, authoriser and administrator roles you can’t afford for anyone to take a day off.”

A respected partner

Despite all of these external challenges, the most significant for Clarke in his career – and also the achievement he is most proud of – is establishing the treasury at Intertek and earning the respect of the business. “We had a vision to become a best in class treasury function providing real support to the business, but as new kid on the block we had to compete for resources and time with other departments,” he says.

The hard work has paid off and Clarke and his team have truly established themselves. This is exemplified through the recent intercompany netting and settlement project which the company is now implementing. “We had to fight for a number of years to get this on the agenda. It has been a challenge to sell it because other functions have projects which are equally pressing. But, I think that everyone in the company understands that it is the right thing to do. We just had to work that little bit harder and shout a little bit louder than the others to get this across.”