Craig Martin, Treasury Practice and Executive Programs, AFP
Last month, I attended two separate events—the AFP Executive Forum and the latest meeting of AFP’s Treasury Advisory Group. The settings for each event couldn’t have been more different (New York and Nashville), and the agendas didn’t have all that much in common. Yet one theme rang true at each one: treasury is playing a central role in corporate decision-making, and that’s going to continue for the long haul. This is also a theme that I came across in the 2017 AFP Strategic Role of Treasury Survey.
But why is this? Simply put, treasurers are the ones with the answers to many other departments’ questions. What will this cost? Do we have the budget to invest in this? What are the risks? Treasury can address these concerns.
“Treasury professionals tend to be quite good at quantifying what other people in the organization find hard to measure,” Johan Nystedt, vice president, treasury for IR Conagra Brands, told me during our opening panel session at the Executive Forum.
Nystedt also pointed out how treasury has connectivity across the organization. Treasury professionals are frequently in contact with the board of directors, but they also know what is going on at the operational level. This gives them unique insights into areas few other departments have.
But that type of clout doesn’t just come with the job; treasury professionals need to earn it. That’s why it would be good to follow the example of Brian Begg, vice president and treasurer for WESCO International, who made an effort to become involved with the entire business. During the Executive Forum panel, he explained how his CEO encouraged him to do work cross-functionally, and it has led to greater influence across the organization. “He connected me immediately with our equipment head; that gentleman runs all of our U.S. businesses,” he said. “So I get a seat at the table because we’ve built a relationship almost for nine years.”
Joel Campbell, vice president, treasurer and chief risk officer (CRO) for H&R Block, has also come to be an adviser for other departments, helping them to gain a better view of the organization. But to be able to pull that off, you have to know what you’re talking about. “The more you work across the organization, people will start to gravitate towards you,” he said. “So you’d better have answers for them.”
It can of course be difficult to have answers for everything, especially in areas where you have very little experience. As attendees of the Treasury Advisory Group meeting noted, practitioners have become much more involved in pension and retirement plans, risk management, insurance, FP&A, investor relations, standard corporate finance, equity programs, and M&A. But if treasurers want to become strategic advisers, then they’ll need to buckle down and learn as much as they can about other functions.
And if they don’t? Well, in that case, not only won’t they be seen as strategic advisers but they might not even be treasurers after a while. Nystedt noted that with more treasury functions becoming automated, people will gradually be phased out as well. The ones who will survive will be the ones who have made themselves indispensable to the organization. “In the future, it’s going to be less of us being treasury professionals and more of us being partners to the business,” he said.
Gain deeper insight into the evolving role of treasurers on Thursday, July 13 with the 2017 AFP Strategic Role of Treasury Survey Companion Webinar. Use the code V896713 for complimentary access.