The Beer-Bellied Treasury

The beer belly (or obesity as the doctors like to call it) is one of the main health issues in most Western countries. The resulting metabolic syndrome increases the risk of cardiovascular diseases and Type 2 diabetes.

Corporate treasuries can also develop a beer belly. The main visible sign of this is bloated middle management. The risk of a severe syndrome increases when the management does not participate in operative work but solely concentrate on managing the operations of their teams.

I know corporations that have as many managers as they have staff doing the actual work. This means that for every operative staff member there is one supervisor whose main task is to participate in treasury management meetings, require reports from the ‘team’, and have meetings with banks.

The beer belly makes a treasury prone to ‘diseases’, such as high costs due to inefficient operation, bureaucracy and slow decision-making, as well as enormous resistance to any initiatives that may create real change. The reasons for this are also clear:

  • The middle management typically has high salaries but their productivity is very low as they do not participate in operative work.
  • The middle management has learned to love meetings because they are a seemingly efficient way of spending time. And if decisions are made quickly, there cannot be enough meetings.
  • The middle management has had plenty of time to dig their defensive positions. They are certainly not going to voluntarily undertake initiatives that would undermine their own position.

The human beer belly is caused by eating too much and/or not getting enough exercise. These bad habits – borne out of complacency and laziness – are also the root cause of the treasury beer belly. It is the job of the treasurer and ultimately the chief financial officer (CFO) to prevent the beer belly from growing.

Below are three key things that can improve the treasury habits:

1. Keep your organisation on the move

Don’t let your specialists settle in one function for too long – instead regularly rotate them in different functions. This makes developing the different functions much easier. This may cause some griping at first, but you can take satisfaction that you are actually doing your staff a big favour by increasing their professional skill sets. Ambitious staff members spontaneously challenge themselves by seeking new duties every few years. By giving a go-getter like this the opportunity to rotate between positions, you can increase your chances of them not changing firms.

2. Keep your organisation lean

Make a point of managers fully participating in operative treasury tasks. This way you can keep your head count reasonable and salaries competitive, which ensures your staff do not have to look for other opportunities only because of money. This way you can also look your superiors in the eye and tell your organisation does not have any blubber when the next round of redundancies hits.

3. Encourage healthy habits

Don’t let a ‘this is the way it has always been done’ culture to form in your organisation. This culture fosters laziness. Instead, encourage your specialists to always challenge the status quo. Emphasise continuous development and give incentives for development initiatives – even if they seem daft at first. This way you can foster healthier treasury habits and lifestyle.

Conclusion

The silver lining is that beer belly is not as great a problem for treasuries as it is for us middle-aged men. In my experience, most treasuries are rather lean and efficient. But even if you don’t have an acute case of ‘beer-bellyitis’ quite yet, this advice can help you prevent it from ever becoming an issue.

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