Meeting the business’ increased demand for strategy support.
The experienced treasurer has always had the necessary skills to advise the board. It is not so much that the treasury skillset has changed significantly, more that a company’s opinion and awareness of treasury has evolved. The global financial crisis of 2008 was a real tipping point, a catalyst for change and a considerable opportunity for treasurers, when the board realised the inherent value of robust risk management.
It was noted in the Contemporary Treasurer 2015 that “year-on-year, treasurers are having greater interaction with their boards and more of their recommendations are being accepted.” I firmly believe this is because of the unique skillset that treasurers – as holistic risk managers - bring to the table. Today’s complex financial and business environment requires this holistic approach, which the treasurer is (fortunately) well placed to provide. So what are the key steps to such an approach that differentiates a good treasurer from an invaluable one?
Firstly, know your basics. A thorough knowledge of basics leads to the confidence to speak easily and freely, and with authority. It enables you to respond quickly regardless of what gets thrown at you. I liken it to why an airline pilot speaks so calmly (“We are going through an area of slight turbulence. Please remain seated”) even when to the inexperienced passenger, it feels like a crash is inevitable; the pilot’s training has prepared him for such situations. When it comes to the treasury basics such as corporate finance and cash and liquidity management, my formal ACT training (combined with on-the-job experience) ensures I am not only confident within myself, but also able to transfer this confidence to my CEO.
Secondly, build a knowledge base – get out there in the real world and solve problems. Be patient, but don’t stagnate. I have gained my broad knowledge through getting involved in anything and everything, even if I wasn’t always welcome! You need to put yourself out there. In real life, you receive imperfect information and risk management is about seeing what isn’t there, you are essentially filling in the gaps.
Thirdly, overlay those necessary soft skills that are difficult to learn in a classroom. No one teaches you how to delegate, manage staff, present in front of a large audience. Sometimes you need to force yourself to do things that might come unnaturally. In the Wizard of Oz, the cowardly lion believes that his fear makes him inadequate. Once he is given the medal of courage, he begins to do brave deeds that previously made him feel uncomfortable, and the corporate world can learn many lessons from this. Take yourself out of your comfort zone, challenge yourself.
Finally, know the downside (understand risk) but also know the upside (how to generate cash and tangible benefits to your company). If you only ever see the downside, you lock yourself into a corner – you will be like Cassandra in Greek mythology, who possessed the gift of prophecy but was never believed. You can avoid such a fate by understanding the business so that you can also seek out opportunities. With such a mindset – understanding the risks but realising opportunities – you will become indispensable.
At the end of the day, I am a realist and attribute a large part of my career to a healthy dose of luck. But along the way, I took managed risks to learn as much as possible, making myself indispensable to the senior management team. After all, as a risk manager it is your role to manage risk, not eliminate it.
You can hear more of Gary Slawther at the ACT Middle East Annual Conference, where you can also test him to see if he really does know everything about chemical engineering!
Gary Slawther, Financing Advisor to the CEO, OCTAL
