Corporate treasurers’ strategic role growing

Corporate treasurers have significant cash reserves at their disposal, and their strategic influence is growing as companies decide how to put these reserves to use.

Eighty-four per cent of senior-level corporate members of the Association for Financial Professionals (AFP) said in a recent survey that corporate treasury’s role has expanded over the past five years.

A nearly identical portion (83%) said this role will continue to expand over the next five years. According to 69% of respondents, the enhanced strategic role is linked to the emphasis on cash management and liquidity in the current economic environment.

And 63% said the expanded role is the result of the close attention that senior management and the board of directors now are paying to liquidity and risk exposure.

“Treasurers provide value at the highest levels of corporate decision-making,” Jim Kaitz, AFP’s president and CEO, said in a news release. “They fireproof corporate finances, shore up shareholder expectations, weigh in on global expansion, build bridges to business units, advise on shifts in payroll numbers, and make major decisions about financial technology.”

Despite the expanding role, many respondents see more opportunities to put treasury’s skills to work. Forty-five per cent said their organisations should take greater advantage of treasury’s skills, talent, and experience to optimise financial performance.

Other findings in the survey:

• 94% of treasurers take the lead role in managing bank relationships at their organisations.
• 37% of treasurers are members of their organisation’s executive committee or C-suite.
• 55% of treasury departments measure and communicate results to their organisation’s executive management and board of directors.
• 46% of treasury departments act as internal consultants to other departments or business units.

“Coupled with ensuring effective and efficient day-to-day treasury management, sound strategic input and strong leadership skills are critical for the ‘new’ treasurer in order to manage and optimise the results and impact of the treasury function,” Elizabeth St-Onge, a partner at survey collaborating firm Oliver Wyman, said in a news release.

—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.