Powering Change: treasury powers ahead

Treasury Talent

Powering Change: treasury powers ahead

Published: Dec 2023

Prioritising communication, networking and desire to learn

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Treasury Today Group has just launched the Powering Change taskforce with J.P. Morgan Payments. We gathered some of the brightest minds in corporate treasury to discuss the essential skills required in the strategic function. A successful treasury remains rooted in expert communication, a deep understanding of the wider business, the ability to build a network and the ability to keep multiple plates spinning. But nurturing and recruiting these skills isn’t always straightforward.

As treasury’s strategic role in the business grows, the Powering Change taskforce gathered a group of senior treasurers at J.P. Morgan’s UK headquarters in London’s Canary Wharf. A lively discussion ensued as participants debated the skills they value most, and the expertise treasury will need in the future. The taskforce concluded that a modern treasury relies on communication and leadership, and a conscious appetite to learn and build networks across a business.

The roundtable opened with an affirmation of the broad and strategic role of treasury today. Franca Aeby, Senior Cash Manager at Roche detailed how she is working with different internal stakeholders to ensure treasury plays a role throughout the business alongside supporting Roche navigating externalities like the economic landscape and geopolitical risk.

Tian Song, Treasury M&A & Capital Market Leader, at a fortune 500 company, echoed that much of her day-to-day is also spent adjusting treasury strategy in response to the interest rate environment, exploring, for example, the risk and opportunities of bond issuance in the current market. She is also working with the company’s ESG team to evaluate the potential impact to the firm’s financing strategy and supporting the company’s M&A activity.

GXO Logistics’ Head of Treasury, Europe, Kemi Bolarin, emphasises the importance of her team understanding the business and being well-equipped to serve it. She is committed to ongoing development in GXO Logistics’ treasury function while maintaining a focus on treasury fundamentals. Kemi’s three key work priorities include being a business-focused partner, actively contributing to the creation and preservation of value within GXO, building a sustainable team with enhanced treasury skills, and driving transformational initiatives such as establishing an in-house bank, implementing a multi-currency notional pool, and introducing a netting solution to improve efficiency and reduce interest costs.

Joanna Durkan, Assistant Treasurer at Rolls Royce Plc said treasury priorities at the company have now shifted away from prioritising liquidity, prevalent during the COVID-19 pandemic. Today treasury is capitalising on the company’s credit rating upgrade, and how to centralise cash most effectively to ensure the best return. “There has been a big shift from the liquidity piece to returns on cash,” she said, adding that treasury is also working with a new team at the top in a period of change at the group.

You’ve got to understand everything that goes behind it – but also put it really simply, and that’s quite hard.

Joanna Durkan, Assistant Treasurer, Rolls Royce Plc

Frances Hinden, Group Treasurer at Shell her team have to invest time managing Shell’s investment assets including the multi-billion pension funds and a large cash portfolio that sits in treasury. The current focus in pension investment is on the ESG integration and sustainability, but limited data and regional differences in regulation make this challenging. “We hope ESG regulation coalescences into some sort of common understanding,” she said. Like others, she is also focused on marketing the role of treasury to peers in the wider business and financial sector to nurture a bench of treasury talent. “Selling treasury is difficult.”

Bente Salt, Group Treasurer at Rentokil has spent recent years focused on supporting Rentokil in a growth trajectory fuelled by acquisition – the company completed 53 acquisitions in 2022. Like Frances, she said her priority is also recruitment and ensuring she has the right people in her team which is a challenge for a company based outside of London.

Treasury’s essential skills

Treasury requires multiple competences. A key priority is that treasury understands the wider business. Another is the ability to communicate with and manage different stakeholder relationships, and the team also needs reals subject matter expertise, around treasury staples like cash management This mix of skills is difficult to find in an individual, but can be spread across the team.

Essential treasury skills also include an ability to cope with competing pressures and keep multiple plates spinning. “Everything is critical in treasury; you are involved in every deal,” said Joanna. Tian singled out the importance of aligning strategy development with sufficient execution capacity, to get the strategies implemented. Elsewhere, the conversation touched on the importance of treasury staff breaking down silos and working across departments. “People won’t talk across boundaries but often it is as simple as picking up the phone. People forget that in one company, we are all on the same side,” said Frances.

If you want the team to learn and succeed, you need to engage with them and be in the office.

Bente Salt, Group Treasurer, Rentokil

Similarly, Bente mentioned the importance of communication and team members’ ability to communicate directly. “It is about knowing when to contact the person who can make the decisions,” she said.

The treasury department at GXO Logistics is actively leveraging technology to address its challenges and is currently exploring the application of machine learning in cash flow forecasting. Kemi anticipates that her team will demonstrate an enthusiastic curiosity and a keen interest in building technological expertise to enhance efficiency in treasury operations. “Cultivating a mindset that embraces technology is crucial, and I consistently emphasise this within the team,” she said.

Speakers shared anecdotes on how some treasury and finance staffers are interested in learning new skills, but others only want to “do what they did yesterday.” Moreover, the hunger to learn is not specific to age.

Bente and Franca also voiced the need for technological skills in treasury. But most often it is not a lack of expertise that is the problem, but the availability of technology itself. Both said the roll out of new technology around cash visibility is notably slow. “When you order food online it’s possible to see if the driver is stuck at a red light. But we still don’t have that live view of cash,” said Franca who added that it is difficult to know which is the right technology to support treasury in this respect.

When you order food online it’s possible to see if the driver is stuck at a red light. But we still don’t have that live view of cash.

Franca Aeby, Senior Cash Manager, Roche

Challenges to building new skills

Nurturing treasury prowess comes with challenges. For example, building expertise and robust internal teams can be made more complex by working from home. Flexible working has benefits but needs to be balanced with staff coming in to support collaboration and enable young talent to access skills and build relationships across the group. “There is a correlation between people coming in and improved performance,” said Frances.

Bente encourages her team to come into the office to work together. “If you want the team to learn and succeed, you need to engage with them and be in the office,” she said. Still, she said positives from new working practices include shifting work between global teams, bringing a new level of business continuity. Treasury at Rolls Royce mandates colleagues come in for three days a week. “It’s working well,” said Joanna.

It is particularly difficult to develop vital soft skills like leadership and relationship building while working from home. The panel discussed how developing a network is already difficult for some people, particularly if they are joining a large company. It is possible to learn how to network from observing others, however. One structured approach our panel discussed includes giving new joiners a list of people they should reach out to and meet in person.

Another way to build a network is to rotate out of treasury and spend time in different finance roles. Frances, who spent time in asset management in the Netherlands, said many people in senior positions have spent time in treasury. However, because treasury is often home to subject matter experts, it can be difficult to get people to move around and learn new skills which is a trend that is accentuated by pressure to focus on becoming an expert. “Having a big portfolio of expertise is going out of fashion, but it really leads to good people,” she said.

Moreover, moving positions helps to improve retention, particularly amongst young people hungry for new experiences. Franca said that living overseas gave her more insights into the business organisation and offered new experiences that cemented her interest in treasury.

People won’t talk across boundaries but often it is as simple as picking up the phone. People forget that in one company, we are all on the same side.

Frances Hinden, Group Treasurer, Shell

What are the most important treasury relationships?

The conversation turned to the most important relationships for treasury across the wider business.

Attendees reflected on the importance of treasury understanding the business and spending time on the shop floor, especially getting to know front line staff with deep knowledge of the business. For example, Joanna’s visit to the factory floor at Rolls Royce imbued a sense of pride in the organisation, and an appreciation of the product and brand. It also provided the opportunity to build relationships that sit outside treasury in the wider company.

For Kemi, colleagues in financial planning and analysis (FP&A) are key allies as both treasury and FP&A are charged with aligning the company’s financial objectives. Both teams have to collaborate to deliver data driven insights and reliable cash forecasts.

Procurement teams offer insights and visibility into the supply chain, while payments and collection help understand liquidity cycles. Tian noted that legal and tax divisions are important allies of treasury as well. Legal and tax support are vital to treasury activities, ranging from day-to-day KYC requirements for bank accounts opening, to the preparation of loan agreements/legal resolutions to facilitate major capital transactions. Franca laughed that she has Roche’s in-house lawyer on speed dial. “We can’t reply to some emails from banks without approvals from legal and taxes because our lawyers speak the same language as the bank’s lawyers and sanctions teams.”

Communication

The panel noted the importance of keeping the language of treasury assessable to all. Kemi aims to “stay in the moment,” always ready to explain something again. She noted that it is usually only bold people who speak up if they don’t understand. Moreover, keeping things simple encourages robust questions that truly stress test and enrich ideas in a back-and-forth process.

Foreign languages can also inhibit conversation in treasury. Bente said that when a Spanish-speaking treasury business partner was introduced in the Americas, doors opened and Rentokil Initial got much greater engagement from local business on treasury matters.

Priorities and perspective can also be a barrier to treasury being understood in the wider business. One way this occurs is because treasury tends to have a long-term view compared to short-term goals in other divisions. At Shell, this could manifest in long-term decision making around the cost of decommissioning oil fields, for example. Frances said this friction often leaves treasury flagging the long-term consequences of decisions made today – and needing to balance future risk while also meeting this year’s scorecard. Joanna echoed that treasury must strike a tricky balance between stewardship and enabler. “You’ve got to wear two hats” she said.

Perhaps of all the skills treasury requires, communication is the most important. For example, attendees espoused the importance of never agreeing to anything that they can’t explain to their board. “I think it’s an excellent piece of advice. It stops you ever doing anything too complicated,” said Frances. Tian added that treasury’s risk-averse mindset leaves teams unlikely to recommend actions where the risk is not fully understood or quantified – but these risk-adverse aspects need to be balanced and communicated carefully to avoid unnecessary friction. “Businesses, by nature take risks to generate economic returns. It is important to clearly articulate the nature of the risks that treasury is concerned with, and make sure the communication with business leaders doesn’t collapse.”

We need to adapt. Clear communication is also essential in supporting treasury’s strategic growth.

Tian Song, Treasury M&A & Capital Market Leader

Treasury involves the ability to communicate ideas and concepts to people who are not financial professionals alongside answering challenging questions from those that are. “You’ve got to understand everything that goes behind it – but also put it really simply, and that’s quite hard,” reflected Joanna.

In addition, treasurers also need to articulate the rationale behind decisions when challenged. Treasurers need to be able to explain why they have reached a decision and convince sceptics they are right. “You have to explain it in a way that makes sense to them so that they will come to the same conclusion as you,” said Franca.

The panel warned against expecting people outside treasury to understand the language of treasury. “We need to adapt,” said Tian. “Clear communication is also essential in supporting treasury’s strategic growth,” she continued. For example, treasury could be a simple back-office function focusing on cash management execution, or a team that takes full responsibility in designing and implementing cash forecasting and capital planning strategies. “My feeling is that it’s not necessarily about what the business expects from treasury. It’s also about treasury building a track record and showcasing what the team can deliver and adding value to the company,” she said.

The skills of the future treasurer

The discussion turned to the skills that will define treasury in the future. Treasury needs to polish its marketing skills to build awareness of its function and make it a sought-after place to work within a business. Joanna said there is not enough awareness of treasury’s unique role at the heart of a business or its exciting helicopter view of all operations.

Attendees were unanimous on the importance of networking to allow people to look up and out; see what their peers are working on and consider new things that they might not have considered before. Other essential soft skills also sit in the future treasurer’s armoury. Treasurers need to be good leaders, coaching, enabling and motivating others. Leadership involves a deep interest in the team and is a vital component of engaging and retaining talent.

Cultivating a mindset that embraces technology is crucial, and I consistently emphasise this within the team.

Kemi Bolarin, Head of Treasury, Europe, GXO Logistics

An interest and curiosity in technology is another essential skill. The role does not necessarily require expertise in technology, but it is important to understand the benefits and have an interest to learn, as well as a good level of knowledge. For example, Franca said she needed to know enough about technology to judge whether bank’s or the company’s own internal IT team’s offering the best fit for treasury’s IT requirements.

Similarly, the future treasurer must have a desire to continuously update skills. “You have to make sure you stay up to date and keep on learning,” said Kemi. However, as demand for new skills emerges, attendees observed that the importance of old qualifications appears to be waning. The once sought-after treasury qualification – MCT Advanced Diploma in Treasury Risk and Corporate Finance – is simply not sufficient.

Treasury today and in the future requires robust communication skills to articulate the role of treasury to the wider organisation and explain concepts clearly. The panel concluded with affirmation of their enjoyment and commitment to treasury, and a determination to make treasury a sought after and effective strategic partner.

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