Feature Series: What I have seen in Great Treasury Managers

Foreign. Welcome to episode two, what I've seen in great Treasury Managers, as we've called it. This is a special feature episode on the Treasury Career Corner podcast, one of four that we're releasing on the Fridays throughout September. But I know that you lot can't wait, so you can actually go in and binge on them. We put them in a separate area of our website so you can actually listen to all the feature episodes if you want to download them. I get asked all about the different stages of your Corporate treasury career, from when you start out as a graduate, getting in there, or discovering it when you first ever started right the way through to being a Global Treasurer. What I would do is these guys at Corporate Treasury 101 who we've linked up with, if you like, they have their own podcast where we break down corporate treasury topics. And they came to me and they said, mike, we want to do some episodes where we really get into the nuts and bolts of treasury careers. And that's exactly what we do. So in this episode we're going to go through what makes an exceptional treasury manager and look at the middle stages and earlier stages of your career, if you like. Not from right entry stage. This is the sort of the. The semi mid level. In the next episode we talk about the senior levels and Global Treasurer. And on the fourth episode we'll have Katie Hardy as well. She'll join me and then we'll talk about some of the issues post pandemic. Anyway, don't forget to rate and subscribe to the podcast so you never miss an episode. Add me on LinkedIn. We'll put that in the show notes. As I say each and every week. Let's get on with the show.

So we're back here again with Mike Richards. How you doing, Mike?

Yeah, amazing. A bit broken from all these horrible questions you're asking me.

You're not letting me off easy, are we?

Oh, we're just going to ask you a couple of questions. I literally feel washed out here, but I think the value you guys are giving to the audience is amazing. And Corporate Treasury 101, as you've done, is. Could be. Oh, is that just for the beginners? No, this is actually all the levels and some of the questions I'm about to be asked I'm slightly nervous about. But yeah, okay, carry on your bullies.

No, the first episode run really well and we really liked having you, so that's why we wanted to get you on another one here, Mike. We wanted to go a little bit further along so we Started with the entry level positions, how get into corporate treasury in the first place? Right. What kind of things you probably study at university and maybe if you don't fit into the box, what are the hard and soft skills that anyway every treasurer needs to have and you can sell yourself as someone that can fit into the role and then even what do recent graduates, new hires into the corporate treasury landscape as analysts or assistants even do day to day and how you move on from that. And so the natural progression of that is really going into treasury manager. We wanted to a little bit touch on what is a Treasury manager and what does a Treasury manager even do. So maybe you can kick us off with that, introduce the role and that level of someone in Treasury's career and what they're expected to do in that place.

One of the things that we actually spoke before with Globe about and yourself and Sam was, was very much more about how Treasuries are structured if you like. So when you're an assistant analyst you're tending to do day to day tasks. You might even work across the front, middle or back office. And I'll give a quick explanation of that because then that sort of segues into being a Treasury manager because you could be manager of the front office, it could be middle office or back office. So again this is a very basic description. So for any listeners saying well I don't do that in my office, I'm sorry but this is just an overall bit of advice as I explain it to one of my team who is starting in treasury as they have done in the past. When you come into treasury or when you are, you'll be a front office dealer. So basically someone will say look, we want to go and buy that company or we've been paid a number of dollars, pounds, euros and other currencies. Buy this company or we need to go and raise this money. Can you go and deal this? Can you pick up the phone and speak to a number of banks potentially or do it electronically or what's the foreign exchange risk on this? So you do fx, FX foreign exchange and you might then do a deal and yes, we've done a deal for a million, for a hundred thousand, whatever it might be and then you close the deal, it's done. You then take the paperwork and you physically hand it off to your middle office and they look at the inherent risk that you've got and you might have this. And again put some show notes for the guys listening today that we what the different parts of treasury do in corporate treasury. 101. These guys do an amazing job and everything else. But anyway, the middle office, so you might have the treasury accountant in there and they are accounting for it to put the journals into the, into the system if you like. Sometimes the back office will do that, but they will inherently look at the risks that are inherent in doing a deal where you've done this deal or you've bought in three months time, we'll get paid this money. What are the risks? You know what, what are the risks that this conflict is going to continue in Eastern Europe? What are the future risks that are going to come through? What should we be aware of? We've had a number of things with derivatives and stuff. And how are we going to do this? That's what, you know, post Enron and I play someone in the past at Enron, he still speaks to me, it's okay, don't worry. But you know, they are looking at all of those risks and stuff. So it's very risk focused in that sense. And then once they've done all that dealing you, it then needs to be accounted for, recorded and then at any stage passed on to your accountants. So that's your back office. It also might be in your back office. You look at your processes and your procedures and are they efficient, are they fit for purpose, are they resilient, are they compliant and all the other UN's and stuff like that. Do they actually, are they working for the company to make sure the company is accurate? And so as a Treasury manager, to come back to your question, very long answer, you will be overseeing maybe all of those areas. You might have an insight into the back office for compliance purposes you won't properly have. So you might have to hand out for treasury accountant who reports into a different line because you can't be seen to influence the work that a Treasury accountant does. You know, they might have to be totally separate. But typically as you start to then go to become the manager, you'll probably then be doing people management. So you might be mentoring or managing. The treasury assistant might have an analyst or dealer or two or three or seven, you know, so you become much more people manager. One of the complaints I had and I said to all these guys at this conference recently was you now some of you treasurers, you become amazing treasurers, you're global treasurers and now you manage 80 people over five continents in three regional treasury centers. Oh, yeah, yeah, yeah. I said, how much management training have you had? And there was everyone going, oh, okay, okay. I said, you're amazing. People managers, because you've accidentally become accidental managers. And I think that's quite unfair on a lot of treasury professionals that as you become more senior and I think it's a massive area. So people listening today, management management training company could come in and sweep up. We're not doing it, we're recruiters. That's it.

Okay, so it's interesting what you just touched upon. Front, middle, back office. So if my understanding is correct, front is more when you're to be in contact with the external world, let's say in contact with the banks to do to execute the deals. Middle of this is okay, making sure we are making sure the risks are taken care of. We look at the things that correctly executed, done, etc. And back office is more background work. Right.

And also in the middle office you'll have more bank relationship management. Some of that will come front office as well. But in actual fact, when you're doing treasury management systems, for instance, that might be more of a middle office type thing because you're looking at efficiency, processing, straight through processing. We need to implement a new treasury management system. We need to do this. You'll give that to your middle office guys because at the end of the day the company is continuing every day it's 24 7. So actually your front office guys might be doing that. And then you say, oh, we need you to look at the treasury management system. Like, I haven't got the bandwidth, I can't do that. Well, so you maybe need a Treasury middle office, treasury analyst or dealer or treasury systems consultant. A lot of the time they will be a good conduit between those things, a good linkage, like a chain, if you like, between back, front, middle office. And that's where they'll sit.

Okay, so deviating a bit from the treasury manager rule, but I'm really interested here into understanding these different aspects of the front, middle, back. The way it sounds is like it's different profiles as well, right? In terms of treasury talents, what kind of profile will more be in a front office compared to the back office? Can you switch between those different.

Yeah, people love it. People love it if you do. But one of the things is, you know, back office people, a lot of people are saying, well, it's about controls, it's about risk, it's about, you know, is that the drudgery? It is if you make it like that, you know, with one of our clients, we're about to recruit a head of back office for them now. Okay, it should actually be. It's actually Head of controls and financial risk management. Because what they're doing is they are. Any of the activity the front office guys are doing, they should have an influence on and actually an input to. Because they're saying, well, yeah, that's great. If you go and do all these commodities, they're a very commodities heavy company. But the fact is, the work that that front office person is doing will then be passed on to the back office. And as you say, if you've worked in the front office, that's a good place to be that you've actually then realized he works in the front office. So I then pass on the middle office. Oh, and they. They pass it across the back office and if you're then going, here's a pile of something which isn't very nice for you and you've got to now de risk all this and you've got to account for it. And oh, you're like, really? Why did you deal like that? Why did you agree to that? Why did we. We should have done something else. And the more that you've got and the. An understanding of that, the better. And some of the best treasurers I've seen have worked and in fact, one or two stick out in my mind that they've done everything. And who goes into there and middle office, A lot of the time you'll become an accountant and you might then become a Treasury accountant. And then when you're from that middle office, you can then go into accounting and controls, you can then go into the front office, you can just continue your career. But as long as you've got an eye to both sides, there are some great treasurers that have done that as a springboard.

Do you have any examples in your recent interviews on your podcast that you can mention off the top of your head?

Just trying to think of some of the people that we've had. There have been so many, you know, 210 has some of you that I'm going to look them up here whilst we're doing this. Go to Treasury Career Corner, everyone. The nice big name check there. Best Treasury. Well, bar Corporate Treasury 101, obviously the best out there sort of thing. I know I'm gonna do it. There's a guy called Chris McConaughey. Chris used to be with National Grid. He's an English guy, but he's gone across to the us. He's got a really good. And he's been with National Grid for a number of years and we actually placed him at National Grid. I'm just looking over the diesel. He's now the CFO in New York for National Grid over there. Great guy. Now he was at Northern Rock in Newcastle, not far from the Scottish borders, you know, say your previous footpath. He was then a consultant. Well, hey, the consultants. That's it. Big for Galam. He was at PwC for a period of time, but then he was assistant manager, Money markets, so their front office, fx, Treasury Manager, Capital markets and funnily enough, Treasury Manager, TMS Implementation did that. Then he became vp, US treasury with a wider remit and everything across that as well. And then was New York Controller and he's sort of. Treasury was definitely a springboard for him himself. Chris is a great guy actually and good to have on your LinkedIn, so definitely listen to that. Now he as an example, he had an MSc in Economics from University of Edinburgh and then he did ACT study back in and completed those in 2010. But at the same time he was, you know, Northern Rock on the graduate program. So he went through a number of different areas. It was a bit more front officey, middle officey. But he did both, you know, as he did asset management, PwC as well. So yeah, he's a, you know, great. There's so many. I mean, it's just, you know what I would say again, some of the other people, I mean, they're just some amazing people. One of the people, Sarah Jane hall, the global treasurer for GlaxoSmithKline. You know, what an amazing lady, amazing career. She's made some great steps now she herself. So I'm just, he goes trying to launch my podcast. I don't know why, it's just practicing to it guys. You know, she's got an incredible career. She has been with GSK forever, 20 odd years, but she's moved up. It doesn't actually give too much on LinkedIn here because she doesn't really do LinkedIn. Why would you? You're the SVP. He doesn't need anything else. But there are some great ones in there. Really?

We'll put them in the show notes. Yeah, that's great, thanks.

Okay, so among those people that you just mentioned, Mike, and overall in general, maybe going back a little bit to the TreasuryManager function, we would expect great managers or good managers to enable the company strategy. Right. Maybe that's the difference actually with a experimented senior analyst or experimental senior assistant. How do you do that? How as a Treasury manager do you come into. Okay, I'm looking at a little bit the broader, the big picture and I want to enable the company strategy, how do you do that as a manager?

Someone said, how as a treasurer do I make a new treasurer to a company they had recently moved, so I can't say who it was, but this lady moved in there, she said, how do I achieve success? And one of the bits of feedback was money. And it's like because. And it wasn't about them saving money, it was about them being the custodian for cash and looking at the risk. So you've got helping the company make money, but actually in treasury you're a support function in many ways. But if you're the custodian for cash and if you think that's how you can be seen and look after, be the safe haven, you know, in tricky, risky times, and you can point to that very successfully, then that's the way. And this was some three amazing treasurers and they said, that's what you need to look after. Look after the company's cash as if it's your own. And another way that I think a treasurer. And we'll do that in the next episode where we talk about some of the Treasury. So I don't want to give too much there, but one of the other treasurers who bury it. One of the first ever episodes, he said, his chairman, even when he was deputy treasurer, so, you know, again his way up, said, could you keep a black book, please? Said, all right. Said, yeah, just every week, take. Go have a coffee on me or whatever. And just look at what you've done this week to move the needle, to make a difference, to have, you know, whether that's de. Risking that or mentoring this person internally in your team. So looking at it across the piece. So it could be front, middle or back office. Yeah, we completed this treasury management system. We said a lot of people in this support functions don't look at what they are doing to actually to the greater whole, to the greater good, as it were, the more that you have that big picture. So you don't work as the treasury manager for. As we said with. With Chris at it for National Grid, you are there as the custodian of the cash, the National Grid, wherever you might be. So looking after it.

Okay, that's interesting because you touched upon. So I feel what you touched upon was, okay, how do you enable the company strategy, but also how do you influence it? Right. If you become the custodian, it's also about influencing the company strategy. Are there any other way of doing so as a manager or is it more like, okay, you need to manage the Cash and become the custodian. Anything else you could do?

Up and down. So I think it's, you know, it's a bit like when I say to people, if you want to get a recommendation on LinkedIn, who do you ask for? And things. And people said, oh, you know, don't ask your mates that you're sitting next to, you know, because, you know, oh, yeah, Mike's a great guy, yeah, you should, you should hire him, blah, blah, blah. You see, next to ask your boss or a previous boss, ask someone that's worked for you, have you mentored them? And the reason is that sounds a sort of random way to ask, answer the question. But the, the answer is by doing that at your job. So if you are a manager, how are you managing? Ask the guys below you, you know, and ask them what they want. All the best managers. And Sam, you talked about this and some of the things with your boss, you know, and, and some of the guys that work for you, you achieve success through them with them, you know, if you just try and do it all yourself, you never really get. They say the sum of the parts is greater than the whole. Similar with your boss, if you can support what they're doing and how they are progressing, then you'll achieve success. Now, by the very same token, if you don't share the same skill set or the same mindset rather as your boss, probably give us a call, you know, that's, you know, at the treasury recruitment company, and I don't usually do that. It's more a lot of the time I've said to people, and I said to you guys on the other episode, that people don't leave jobs for money necessarily. Career factors and various other bits. But good boss or manager, decent work, life balance, friendly team achievements being recognized, those are the key things. But actually you've got to share that vision with your boss. Now, that's actually quite sometimes difficult because treasury folks are busy, but they're also very black and white a lot of the time, focusing on the numbers and stuff. So you've got to say, right, how do I help you achieve success and look good boss?

Getting into that treasury manager role, there are some roles, especially management roles, right, in most corporations, which you kind of have to have done the analyst job, you have to have done the legwork first to be able to then manage people elsewise. Is that how it works for a Treasury manager? Do you have to have been an analyst or an assistant? Or do you again, see treasury managers coming in through accounting, finance and other parts of the business.

I do see them coming in from accounting and sort of slotting in quite well. Where some of them struggle is if they don't have any management expertise and as I said, becoming accidental managers, if you like. There's suddenly thrust in there, oh, here's your team of 2, 3, 4, 2 accountants, plus someone in the back office. Can you mentor them as well? They're like, oh, I've never managed anyone, so give them some training. If you're a treasurer listening today or someone like that, that's definitely one thing to do. Yeah, it is really good if you understand what a treasure is.