The working relationship between the CFO and treasurer is one of the most important elements of corporate success. At its strongest, it is collaborative and trust based to the extent the treasurer is the CFO’s closest technical advisor, especially on balance sheet decisions that might affect valuation, covenant headroom, ratings or investor confidence. In well run finance function, the CFO lays out the strategic intent and the treasurer pressure tests feasibility, risk and durability. Together, this strategic duo present a unified view to the board, lenders, and investors and crucially, many CFOs also rely on their treasurers as a counterweight to optimism and salutary voice of caution.
The ever-expanding role of a CFO
Today, the expanded role of the CFO is almost unrecognisable to a decade ago when accountancy skills and an eye on the regulatory piece almost sufficed. Today, the CFO must have a view of the entire business, in possession of financial reporting and accounting skills, broad balance sheet expertise and the ability to lead large profit and loss, P&L, statements or commercial finance teams, particularly in growth-led businesses, and the financial planning and analysis, FP&A, to identify future risks and opportunities with a strategic eye.
The CFO requires risk and liquidity, capital markets, tax, treasury, audit and M&A expertise in a shopping list of technical abilities that enables meaningful conversations with division counterparts at a deep level. They must also hold softer leadership and communication prowess and require the personality to manage and build multiple relationships internally and externally, the most important of which is chief confident to the CEO, in what Mckinsey describes as “a cross-cutting common denominator role that links every part of an organisation.”
The CFO role is less about financial correctness and more about enterprise leadership, continues David Sayers, Managing Director at executive search group Pure Search. A CFO must own the external narrative with investors, lenders and analysts and balance growth ambition against financial discipline. They must be able to lead large, diverse teams and be commercially fluent – not just financially rigorous. “The CFO must operate as a strategic partner to the CEO, not simply a guardian of risk. Treasurers are typically excellent at downside protection. CFOs must be credible on upside capture as well.”
Add in the fact CFOs are under enduringly grinding pressure to achieve more with less as companies seek to cut costs and upskill their teams while navigating geopolitical instability, and it’s not surprising burnout rates are high. Global CFO turnover reached around 15% in 2024, equivalent to roughly one in six CFOs changing role in a single year in one of the highest levels on record, according to Russell Reynolds Associates.
Essential treasury
Cue the treasurer, sitting on the CFO’s right-hand side with specialist, niche knowledge, embedded into the financial structure, risk management and resilience of the business, and more important than ever. The treasurer’s role is both supporting and distinct from the CFO. They don’t necessarily see the operational side of the business, and don’t need to know the latest accounting or evolving tax standards, and they have no contact with the CEO. But like the CFO role, treasury has also changed in recent years and moved decisively from execution to judgement.
Traditionally treasury was technical, operationally functional, managing cash, debt, hedging and banking relationships. Today, best in class treasury leaders are also heavily involved in capital structure strategy, scenario modelling and stress testing, acquisition funding and integration, or dividend and shareholder return policy. The role is both looking forward, anticipating what lies ahead, but also looking backwards, quantifying dollars saved in a constant reminder to the organisation of the treasury function’s real value.
“In many organisations, treasury is now the centre of gravity for financial resilience. The role increasingly demands commercial understanding, stakeholder influence, and the ability to translate complex financial risk into board level decision making, skills much closer to the CFO toolkit than before,” adds Fi Wallace, Head of Treasury and Interim Tax at Pure Search, working alongside Sayers.
Susan Quartarolo, President and Treasurer at Sony Capital Corporation, where she leads a 12-person team split between New York and California, explains that treasury has developed multiple relationships across the company, and increasingly brings them into play in its interaction with the senior finance team in a strategic role that has evolved far beyond standard cash management.
For example, treasury at Sony works closely with accounting teams on IFRS 18 reporting FX exposures and the tax implications for M&A in a particular country. Elsewhere, treasury has worked with the accounts payable teams to support automated payments and improve cash forecasting. “There is a sense of true collaboration and working together,” she reflects, describing an array of “hands-on” and “very approachable” relationships.
Treasury puts forward recommendations and new ideas to the senior finance team they want to develop or are particularly interested in – stablecoins and crypto, for example – and is subsequently empowered to run with strategies and trusted to raise concerns if needed. “We are really allowed to do what we do subject to our corporate policy and procedures – but should we need additional support, we can reach out and escalate, and request input,” she says.
In that spirit of collaboration, treasury at Sony is also highly visible. The team conducts roadshows with different departments to help further educate on the roles and responsibilities of treasury. “Some people know what we do in treasury, but some don’t. There is so much that treasury does for the whole company around financing and investing; dividend planning and M&A, it’s important to meet with other departments and explain our role and introduce ourselves. We find teams might be facing an issue that we can provide a strategy for.”
Seeing the blind spots
A good treasurer will also see the CFO blind spots, adds Wei Hock Lee, Head of Assurance Services at Ernst & Young LLP in Singapore. For example, he points to CFOs often having poor visibility of data, and over estimating AI readiness. “AI is such a buzz word and a priority for CFOs, but we are seeing cases of the CFO over-estimating AI adoption and the ability of the team to enable the transition,” he says.
He also notices that CFOs can often under-appreciate the need to upskill the treasury team, particularly regarding rolling out new technology to better manage evolutions in the risk landscape. Treasury’s ability to respond to increasingly dynamic and volatile financial markets, buffeted by geopolitical shifts, relies on new technology, yet many businesses in APAC still operate with fragmented systems that prevent a centralised view. Cybercrime is another issue increasingly landing on treasury’s desk, he adds.
Lee also reflects that treasurers are increasingly stepping into scenario planning, identifying new growth and expansion avenues, and the accompanying risks. Anecdotally, he observes that this kind of partnership blossoms when the CFO assumes the role of mentor to the treasurer.
“Working with the CFO, treasurers are connecting the dots to understand the wider business of the organisation they serve,” he says. “Treasury is looked on as operational in nature, but it can become a strategic piece of the entire finance function. The onus is on the CFO to amplify the benefits of a high performing treasury function to the wider organisation, but it also requires the treasurer to plug into a larger ecosystem. If an organisation provides the opportunity for treasurer to expand their role, it can dramatically change a business.”
Moving out of treasury?
Although treasurers can and do become the CFO, despite the proximity of their working relationship, stepping up into the CFO role is not a particularly well-trodden path.
Wallace and Sayers observe that the treasury talent pool is not a natural hunting ground for listed companies looking to recruit into the CFO role. Over the last decade, and especially post COVID-19, amid volatility in rates and FX, supply chain disruption, and tighter capital markets, boards have rediscovered the value of deep balance sheet expertise and in this environment, treasurers are far more visible as potential CFOs than they were historically. Still, in their experience of hiring CFOs into positions in listed business, treasurers rarely make it onto the short list.
In smaller businesses, the CFO and treasury roles do often combine. But even here, they report a recent trend of CFOs in smaller companies hiring treasurers for additional expertise driven by the complexity of treasury, and growing demands of the job outside the CFO remit, in another sign of the distinction between the two roles. Nor do they see a clamour of applications from “green-eyed” treasurers in their CFO mandates either.
But because treasury is specialist and niche, it can be difficult to move for those at the top of the profession. Treasurers can become too closely associated with risk avoidance rather than value creation; perceived as specialists rather than enterprise leaders and less exposed to customers, pricing decisions, organisational leadership, and cultural change. The challenge, says Wallace, is gaining visibility and breadth.
“The treasurers who do progress tend to have to take on hybrid roles like treasury and FP&A, corporate development, or transformation. They might have led during crisis moments where they were highly visible to the board, and built strong relationships beyond finance, particularly with CEOs, private equity sponsors or investors. In short, treasurers don’t fail to reach CFO roles because they lack skill but because their experience is sometimes too narrow unless they consciously widen it,” she says.
It’s something Quartarolo has done at Sony, taking on the management of the company’s US$7bn 401k plan two years ago. “It’s possible to stay in treasury and take on more responsibility,” she says, observing that more treasurers are broadening their experience by moving into insurance and pensions and investor relations roles that complement their existing positions, and also provide valuable experience of working in more strategic roles.
She reflects that a typical move up for a seasoned treasurer seeking the next challenge could include moving to work for one of the business groups within a large company. Taking on this kind of broader role would help build new operational experience and skills, distinct from treasury.
“Treasury has unique, specified skills that are focused particularly on the operational lift. Moving to one of the business groups would appeal to most treasurers seeking to expand their skills set, especially in a company that is as large as Sony,” she concludes.
