Spending Corporate Cash Piles Becomes Strategic Ground for US Treasurers

In the aftermath of the financial crisis, corporate boards are paying close attention to liquidity and risk exposures, which have elevated the strategic role of US corporate treasurers, according to a survey by the Association for Financial Professionals (AFP).

According to the AFP, the parent of gtnews, that trend is expected to continue in the next five years,

The ‘AFP Strategic Role of Treasury Survey’ found that the role of corporate treasury, the subset of finance that assures that an organisation has enough cash on hand to meet its needs, continues to grow in strategic importance as global commerce expands and as companies face business decisions about when and how to put historic cash piles to use. Oliver Wyman provided insights and financial support to the survey.

With critical financial insight, treasurers are uniquely positioned to evaluate strategic cash deployment, ranging from financial options such as share buy-backs, debt repayment or dividend increases, to operational alternatives such as capital expenditures, acquisitions or product development.

“Treasurers provide value at the highest levels of corporate decision making,” said Jim Kaitz, AFP’s president and chief executive (CEO). “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.”

Elizabeth St-Onge, partner at Oliver Wyman, commented: “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,”

According to Alex Wittenberg, partner at Oliver Wyman and head of the firm’s global risk centre: “The role of the treasurer will only become more strategic as more corporate leaders and Boards of Directors focus on optimising the use of cash on their companies’ balance sheets and improving their performance in an increasingly uncertain business environment.”

Key survey findings:

  • 84% – Corporate treasury’s role has expanded over the past five years.
  • 83% – The role will continue to expand over the next five years.
  • 69% – The enhanced strategic role is linked to the emphasis on cash management and liquidity in the current economic environment.
  • 63% – Corporate treasury’s expanded role is the result of the close attention that senior management and the board of directors now pay to liquidity and risk exposure.
  • 94% – Treasurers take the lead role in bank relationship management.
  • 75% – Corporate treasury has strong access and visibility to the organisation’s executive committee/C-suite.
  • 37% – Treasurers are members of the executive committee/C-Suite.

The survey also explored staffing realities, communications skills and leadership development necessary for successful treasury departments.

In March 2014, AFP surveyed its senior level corporate practitioner membership, including chief financial officers (CFOs), treasurers, controllers, vice presidents of finance and assistant treasurers, plus non-members with similar job titles, yielding 243 responses. The ‘2014 AFP Strategic Role of Treasury survey’s’ content and conclusions are the sole responsibility of the AFP research department. The full report is available here.


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