Creating an Efficient Treasury Team: The People Formula

Today’s business leaders realise now more than ever that regardless of their product or service, their employees are critical to company success.

The ‘People’ pillar is especially evident within a Treasury function, where lack of time, resources or experience can expose a business to significant market risk and capital loss.

Some of the common shortfalls within Treasury teams include:

Excessive key-man risk 

With only one or two employees responsible for the majority, if not all, the operational duties, this puts the business at considerable operating risk. 

You only need to look at the recent impact of COVID19 (employee sickness, redundancies and remote working) to recognise the importance of taking a collaborate approach, collating resources and documenting Treasury procedures.

Lack of financial market risk experience

While Treasury employees tend to have accounting or finance backgrounds, they don’t necessarily have market risk or trading experience. These skills are relatively niche, and without this experience, P&L volatility is often considered a standard business risk, rather than a controllable one.

Lack of alignment to commercial & risk management objectives  

Operational objectives should align the company’s commercial strategy and risk appetite and be documented in a Treasury policy. Unfortunately, this is often not the case, with Treasury staff operationally focused, rather than focused on the company’s overall strategy.

Strategic KPI’s should also be established and reported on as part of the employee performance review with the CFO or Group Treasurer. However, often Treasury staff are measured by their operational output, not their strategic contribution.

How to Create an Efficient and Aligned Treasury Team: The People Formula

Up-skill internally + optimise procedures + external insight to bring it all together

People in Treasury should feel empowered to innovate and perform their day-to-day tasks in alignment with strategic business objectives. To do this, companies should seek to up-skill their Treasury stakeholders so they feel prepared and informed on critical market risk decisions. Their performance should then be measured on how well they navigate the market and enhance the company’s cashflow – a much more powerful motivator.

All procedures should be documented electronically. This task not only ensures processes are captured on record, but it provides an opportunity to review and optimise workflows where needed.

An independent, external Treasury advisor can assist with these improvements – educating staff, recommending appropriate systems to use and delegating optimised workflows. As experts in financial market risk, they can also identify areas for improvement that can mitigate unnecessary risk immediately, but also create leverage for future initiatives.

With an over-arching view of the team and experience in structuring Treasury operations in multiple sectors and organisations, an external advisor can bridge the gap between treasury staff and senior management, to ensure that all key stakeholders align to the same strategic goals.

By investing in their People, Treasury managers will see a more engaged team, with improved critical decision making. This inevitably leads to more proactive responses to the market, reductions in financial risk and increased cash and liquidity.

Thomas Alexander, Partner, Rochford Group

Thomas Alexander is a Certified Financial Technician, with a Masters from the University of Sydney. As a specialist in business process and systems improvement, Thomas oversees Rochford’s product development, leading projects in the agriculture oil, FX brokerage, global education and pharmaceutical sectors. He also manages FX hedging programs on behalf of clients.

Rochford Group

Rochford is a respected, global treasury advisory firm, specialising in financial risk management, hedge accounting and currency overlay services.

With decades of experience, the Rochford team are trusted advisors to private equity, financial institutions, corporates and not-for-profits. They equip CFOs with 360-degree awareness of financial market risk on their business, enhancing cash flow and profitability.