Talking to treasurers over the last week or so, a constant theme has emerged: treasurers are enjoying themselves. Such a message may come as a surprise, enjoying yourself in the midst of a financial crisis and economic downturn may seem bizarre. But there are good reasons. Treasurers across many different industry sectors have risen to the challenge thrown down by current business conditions. In doing so, they have enhanced their reputation in the organisation and are clearly enjoying their new-found status among their colleagues, who are seeing treasurer skills and competencies used to good effect at a testing time. It is the same for the ACT, which has always been well regarded and is now also seen as invaluable source of advice on market conditions and corporate thinking by governments and regulators. But let’s not get complacent, or take our eyes off the ball. Unprecedented challenges remain and treasurers must continue to adapt. Take, for instance, the issue of raising finance in the current climate. Wherever treasurers look for finance they have to ensure the organisation is able to articulate its business strategy. When dealing with potential investors, treasurers should ensure their organisations follow three key principles: transparency, accountability and upholding best-in-class corporate governance. Funding will only be forthcoming for those organisations with high standards. It is a rapidly changing world and treasurers may have to revise the way they look at the cost of funding. It may be time to move away from thinking of cost in terms of spreads, and instead focus again on the cash cost and the charge to the profit and loss account. Why bother with the price that your debt instrument is trading at on secondary markets? Treasurers understand that the years of excess liquidity – when banks would be endlessly flexible on the way they did business – have gone. As far as the banks are concerned the days when their balance sheet was an entry ticket to ancillary services are over. Lending now has to wash its face in its own right, and the vague promise from treasurers of other business coming the banks’ way at some point down the track is no longer good enough. As well as this changed environment, treasurers have to be careful in the way they choose their banking partners. With the current trend towards nationalisation or part-nationalisation, banks are under pressure from governments to direct lending towards a domestic rather than an international market and treasurers need to ensure that they don’t get caught out by a politically inspired funding gap. As treasurers gather in Manchester for the ACT Annual Conference it is fair to say that so far the treasury profession has had a good crisis. But it’s not over yet and the profession must continue to meet the high standards it has set itself. PETER WILLIAMS EDITOR
