Much ink has been spilled on the ever-expanding role of the CFO, but far less has been said about how such changes might affect the rest of the finance team.
A recent survey by EY now aims to detail how the role of the corporate treasurer could change in the years ahead. The upshot? Treasurers, much like their CFO counterparts, are expecting a sea change in the near future.
According to EY’s survey of nearly 1,000 treasurers from around the world, 79% expect their role to evolve “somewhat or significantly over the next five years.” How precisely might the role be changing? EY’s research suggests treasurers are facing growing expectations to drive “value creation,” which the firm defined as any “activities undertaken by treasury to drive organizational success.”
Eighty percent of respondents said “regularly identifying opportunities for creating new value is generally or very important for their role.”
Just about a third (37%) of respondents believe there is an increased emphasis on strengthening cash flow forecasting and management in their role, while the same share of respondents expect more emphasis on managing financial risk.
EY also surveyed a set of 249 other senior finance leaders — including CFOs — to get their take on the role of the corporate treasury. Notably, 84% of CFOs surveyed said they expect treasurers to find new value opportunities, and 93% expressed confidence that their treasurers have the skills to do so, according to EY.
“In the past, treasurers tended to be viewed primarily as custodians of cash and risk managers, focusing on liquidity and compliance,” EY officials wrote in the report. “Now, the treasurer’s role is undergoing a profound shift, in the same way that the roles of the CFO, financial controller and wider finance function are also shifting. Treasurers are increasingly expected to evolve into strategic partners who contribute to organizational growth — for example, by providing valuable insights around cash visibility and financial risk to help inform decision making.”
Still, despite those changing expectations, treasurers must reckon with their usual day-to-day tasks. The report noted a “considerable amount of treasury time is consumed by traditional activities.” For instance, respondents said they spend about 25% of their time addressing liquidity flow and cost of capital, and another 18% on managing cash and bank relationships. But respondents did also say they spend about 16% of their time “making and addressing strategic decisions.”
“Even when they are involved with strategic initiatives, less than half (41%) are extensively involved,” EY officials wrote in the report. “As a result, their organizations could fail to gain valuable insights from treasury in areas such as cash positions and risk exposures. … Treasurers should therefore look to play a more active role in shaping strategic decisions.”
In an email to CFO.com, Casey Kernan, EY Americas treasury leader, financial accounting advisory services, said that treasurers are expected to be “the ultimate business partner.” He added that a treasurer “should drive or be a pivotal actor in all cash performance enhancement enterprise-wide programs.”
The report included a handful of recommendations for CFOs to help treasurers meet new expectations. Among the suggestions, EY officials said finance chiefs should “raise the visibility of treasury at the board level.” That could include asking treasurers to talk directly to the board about their strategies for cash management and risk minimization, for example. The report also recommended that CFOs “engage [the] treasury team with commercial and strategic decisions.”
“As the scope of their role expands, it is increasingly important for CFOs to build a strong team of leaders and functional experts around them,” said Myles Corson, EY’S global financial accounting advisory services, strategy and markets leader, in an email. “This includes developing a succession plan which in many cases will include existing Controllers and Treasurers. An important part of developing the next generation of talent within the finance function is exposure to the board and the opportunity to develop board presentation skills. Boards generally welcome the opportunity to interact with the extended finance leadership team and hear from subject matters experts.”
EY’s treasurer survey is the latest in the firm’s ongoing “CFO Imperative Series.” As part of the series, the Big Four firm last year released the results of a similar survey of corporate controllers, who also said they expect significant changes to their jobs in the years ahead. Perhaps unsurprisingly, respondents in that survey also said their jobs were becoming increasingly “strategic” and focused on “value creation.”
Editor’s note: This story was updated to include comments from EY on the report.
