Battered but unbowed

Treasury market update April 2009

This spring the PwC Treasury team spoke in depth with a number of Treasurers, asking their opinions about a range of issues. These findings are reinforced by insights gained through ongoing relationships with treasury professionals throughout the year. Over the next few weeks we’ll be summarising the main findings from those discussions and we’d very much like to know your thoughts.  Please use the ‘comment’ links below to add your views.  Yann

Battered but unbowed

Despite these being difficult times for Treasurers, most are coping well with the pressure. Past experience of recession is a help, as is a strong sense of being part of a team, working alongside the CFO and other Board members to meet the challenges caused by the financial crisis. Although some may be feeling the weight of their responsibility for funding adequacy, they also appreciate that many other companies – and Treasurers – are in the same situation. Greater communication between Treasurers is thus seen as a potentially helpful way of alleviating stress.   

A silver lining?
Many Treasurers find encouragement in the upsides associated with the increased importance of cash management and treasury’s role – particularly increased visibility and greater “air time” or contact with the Board.

Where in the past Treasurers might have attended Board meetings just once a year, now their input may be required once a quarter. Even if treasury roles haven’t changed significantly, the attention paid to them has. The greater contact with Board members is calling on the high-level skills that Treasurers possess – the ability to communicate potentially complex funding and liquidity issues in high level, business and strategic terms.

Selling Treasury
Another positive repercussion of the credit crunch is that treasury functions are being encouraged to work more closely with the business. As already noted, this opens up new opportunities for managing cash and working capital more successfully, as well as enriching the treasury role. It highlights the importance of “sales” skills in the treasury function. Buying services is one thing; explaining how treasury can help a business perform better is another.

Treasurers are also finding intellectual stimulation in responding to the difficult market, while for some there is also satisfaction in seeing positive results from past “conservative” policies. They are also aware of the need to think ahead, linking strategic business decisions to liquidity and working capital needs.

Stimulation and job satisfaction aside, sustained pressure for a long period of time is a potential problem. Systems, processes and people have been tested – many to the limit.  The stress can feel unrelenting. Maintaining high performance for the unspecified future could be a tough challenge.   

What are the key skills that the Treasurer needs to deal with these issues?  Check back soon to find out.