Companies Increasingly Seeking Execs with Banking and Treasury Experience
As the financial crisis grips a growing number of companies, corporations are increasingly interested in executives with banking and treasury experience. In fact, a Financial Week report argues that many former Wall Street exiles with expertise in credit and liquidity issues are finding homes on the other side of the table in corporate treasury. The report states, “Almost overnight, treasurers have become the go-to finance executives at many companies, as CEOs, CFOs and directors all lean on them to know at all times where—and how safe—the company’s cash is.”
Executive search firm, A.E. Feldman, notes a few years ago, thanks to Sarbanes-Oxley, finance executives with experience in corporate controls were in high demand. Amid the current financial crisis, however, companies are increasingly seeking executives with banking and treasury experience who can tackle credit and liquidity issues. Moreover, A.E. Feldman says due to volatility within the credit markets, corporate treasurers are increasingly looking to minimize risk. The firm adds that in addition to a focus on risk, there is also need for greater transparency” within corporate treasury.
Treasury advisory teams provide a number of treasury services, including risk assessments, treasury management assessments, cash & liquidity management, and bank relationship management. Treasury professionals must have strong knowledge of foreign exchange risk management as well as domestic and international cash management, cash flow forecasting, treasury organizational models and risk technology.
Opportunities to “Scoop up” Talent
The current recession is an opportunity for smart companies to upgrade their talent. Financial Week, Jim Gouin, Chief Financial Officer of Tower Automotive and a former Controller at Ford Motor, said in a statement that the uncertainty in the commercial banking and financial services industries “clearly gives different types of industries an opportunity to attract some very talented people.”
The report concludes that many treasury departments are more than happy to scoop up that talent. Employing a former banker in its treasury department, the report contends, could give a company greater “street cred” to develop lending facilities with banks and get better interest rates. Many bankers also have significant skills in hedging foreign exchange, dealing with rising commodity prices and conducting due diligence for mergers and acquisitions to potentially offer treasury departments. Of critical importance though is the ability to understand how cash management fits within the context of the business.
How the unprecedented changes taking place in the banking industry will affect corporate treasury was the focus of a standing room only event during the recent AFP Annual Conference in Los Angeles, according to Treasury Strategies. Among the conclusions of the discussion is that Treasurers are feeling mounting pressure from CEOs who are seeking more information.
Initiatives at the forefront of corporate treasury jobs are making sure credit agreements are buttoned up, ensuring compliance with all covenants, as well as upgrading technology and communications to give global visibility and transparency of information.
The panel discussion also found that Treasurers are now more focused on shorter-term maturities as well as more secure investments. They have lost some confidence in the ability of rating agencies to rate investments, and they want to “look under the hood” of Money Market Mutual Funds to see the underlying instruments and understand what the funds are invested in.
Moreover, today treasurers are looking at risk with a new perspective and several kinds of risk now are of particular interest, including counterparty risk, receivables management – credit quality of customers who owe money and commodity risk. Treasury Strategies also reports the panel found that technology has become more important for global visibility, transactions execution, and instant reporting to management. Lastly, relationship management is more important than ever. Treasurers looking for red flags about their bank’s solvency want to hear from their bankers on a daily basis.
Are you working in corporate treasury? If you want to grow your career or discuss your company’s talent needs, contact A.E. Feldman’s President, Mitch Feldman today.
