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Understanding Corporate Treasury: Strategic Financial Management

Learn about the role of corporate treasury, strategic challenges, treasurers' expanded role, dimensions of treasury, treasury design, and more. Explore how treasurers make decisions on investments, risk management, and financial strategy.

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Understanding Corporate Treasury: Strategic Financial Management

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  1. Peter MatzaEngagement Director Roshun Tulkens MCTInternational Treasury Manager,Reckitt Benckiser The Contemporary Treasurer GTR Mena Trade Finance Week February 2016

  2. As a Chartered professional and global body the ACT has two primary concerns • to advance the interests of its members, students and the corporate treasury community • to enhance the understanding and appreciation of corporate treasury as a discipline in financial and business management.

  3. What is corporate treasury? The international business of strategic financial management • How do we decide what to invest in? • How do we raise the money to make those investments? • How do we control the risks in the organisation?

  4. Treasury Competencies • Technical skill • E.g. Financial risk management, treasury operations, governance • Behavioural skills • Influencing capability • Business skills • Knowledge and information management • Roshun, comments?

  5. Strategic challenges • Treasurers are involved in bringing together financial strategy and business strategy to form corporate strategy • At the strategic level, treasury is about advising on appropriate choices, the trade-offs and compromises involved • Treasurers need to demonstrate the skills and capabilities needed to operate successfully in today’s business environment

  6. The dimensions of treasury • Centralised / de-centralised • Head Office / regional treasury centre • Industry sector / size of business • Level of international versus domestic business • Divisional structure / closeness to operations • domicile / currency • Corporate culture • Cost centre / profit centre / value add • Life cycle / stage of development

  7. Treasurer role expanded • Enterprise risk • Commodity risk • Insurance • Tax • Mergers & Acquisitions • Investor relations • Real estate • Pensions • Corporate strategy

  8. Treasury design • In house banking likely to be more difficult • Skill set will change • Less factory like, more boutique • Risk management more sophisticated • Less automatic use of derivatives • More use of regional / local treasuries & facilities • More supply chain finance • More relationships • Banks, investors, 3rd party funders (e.g. ECAs / Credit insurers), exchanges

  9. Who does a treasurer talk to? • CEO / Board • CFO • Senior Finance – Tax, Sales, Procurement • Other finance / sub cos • Banks, other credit providers • Audit – internal / external • Investors – with IR (many ignore DCM) • Roshun, comments?

  10. Treasury challenges • Financial services relationships changing • Traditional financing options scarcer, new options more diverse • Risk factors prominent • Concerns especially around counterparty risk - ‘KYB / KYC’ – who am I doing business with? • Financial services regulation

  11. Questions for the treasurer/finance team, Peter Matza and Roshun Tulkens • What is the organisation’s strategy? • What is the mix between business and financial risk? • What is your financial strategy? • Liquidity, shareholder returns, counterparty risk,ratings, FX / interest rate risk • What is your approach to bank / service provider relationships and how do you assess performance? • What are your objectives? • What are you worried about?

  12. Questions for the financial service provider, Peter Matza and Roshun Tulkens • What is your approach to relationship management? • How are you rewarded for dealing with me? • What are your strengths and weaknesses? • Should we really do this deal with you? • Who would you deal with if you were me? • Are you qualified?

  13. How to get involved with the ACT • Visit the ACT’s website www.treasurers.org • Register online to receive ACT’s monthly e-newsletter • Follow the ACT on social media • Email enquiries@treasurers.org • Call the ACT today +44 (0)20 7847 2540

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