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Treasury Management

Strategic Finance Leaders to Overtake Career Treasurers in Talent Race

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October 09, 2019

By Joseph Neu

In the race toward the future of finance, should talent development programs be molding leaders for general finance, separate from specialist functions like treasury? 

Our talent-themed treasurers’ meeting last week at the University of Washington’s Foster School of Business revealed a deepening fault line between treasurers who are part of strategic finance leadership rotations and those who are career treasury.

  • It also showed that more rotational programs designed to foster talent and develop future finance leaders will include specialist (read: treasury) function leadership roles.

Welcome to the specialist side.” That’s what one member, newly arrived in treasury as part of her strategic finance leadership rotation, was told when it was announced she got the role of treasurer.

  • Treasury and tax tend to be specialist assignments that are not always integrated in finance leadership or rotational programs. The mind-set of being different is often part of the culture.

We are different. The “we are different” mind-set was underscored by another member who, at the conclusion of a discussion of finance leadership and rotation programs, pointed out that treasury mostly lies outside these at his company. But that’s quickly becoming the minority view, which he acknowledged.

Next-generation treasurers likely to be part of a strategic rotation. Indeed, at the meeting of our Treasurers’ Group of Mega-Caps in the spring, I asked the treasurers who have been in the role for 10 years or more whether they thought they would be replaced by a strategic finance leader or a treasury veteran.

  • Most said that a strategic finance leader was more likely. Meanwhile, the strategic leaders may flow through the AT or senior director position.

Here are two reasons why strategic finance leaders will absorb specialist functions:

  1. Technical skills will be embedded in machines. The specialist function silos are likely to break down further in future finance roles where smart machines and AI do the heavy lifting on executing hedge programs and even issuing debt. People will be migrated to human activities like problem-solving and business support coordination.
  2. Coverage model for the business. The business support function of treasury needs to start at the top. One member who is part of the strategic rotation treasurer cohort noted that she has been speaking with other treasurers about how to better support the business from treasury. “The best way is to elevate the business support role to the highest level and double-hat treasury leaders with a business coverage role, akin to how banks cover clients. Having someone in the role who has been directly engaged with the lines of business through their career will help.”

The key success factor missing from many treasury organizations with treasury business support or consulting roles is that they are not at a high enough level to have the needed impact.

  • The need to put business support at the top of the org chart for each area of the finance function is likely what will put specialist functions like treasury into every strategic finance leadership rotation before the end of the next decade.

Question everything. The final impact that strategic finance leaders rotating into treasurer roles will have is to question and revalidate much of what treasury does. This is increasingly the mandate CFOs are giving them.

  • One example is questioning the extent to which treasury dominates the procurement of financial services—banking and insurance, in particular. Another is how the company approaches risk management—with a focus on bringing a more integrated framework to manage the various risk factors enterprises face.

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