Innovation and Optimization in Corporate Landscapes with Lisa Dukes and Chris King

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they build their careers, where they are now, where they see both themselves and the treasury profession going to next. And a special thanks to flywire, our fantastic sponsors. If you've ever wondered whether there was a way to ease your international transaction hassles, they're the guys to talk to. If you follow the link in our show notes, you can see me talking to my mate Greg Levin, their Senior VP of Sales. I get to ask Greg about who are Flywire and how they can help you and your treasury team with your cross border payment headaches. Just follow the link to the interview in today's show notes. And now let's get on with the show. And this week's show is a bit of a first. I'm actually joined by both Lisa Dukes and Chris King, the co founders of Dukes and King. Dukes and King are a corporate finance and risk management firm specializing in end to end innovation optimization in corporate landscapes. Both of them are passionate about using their experiences to support others within the treasury to manage risk, create value, avoid pitfalls and maximize opportunities. Yes, I'm reading from the script, yes I'm making sure. But basically what I've known Lisa for a number of years got to know Chris as well. What we're going to do today is talk about both their treasury careers and then they came together and formed Dukes and King, but also talk about what they're doing to help treasurers out there and everything else. We'll start off with Lisa, then we'll come to Chris and then we'll sort of intersperse between the two. So Lisa, if you would, how did you first start in finance and then later on you discovered Treasury? Over to you.

So I took the decision very early that I wanted to work in finance, which I don't know whether that was a good choice or not, but I took one of the few accounting scholarships immediately out of college to become an accountant and avoid getting into student debt, which looking back was a great decision. As a result, I qualified as an accountant very young. So I quickly decided that a life of an auditor in practice wasn't for me and in my newly qualified years I sought out some of the more niche and interesting roles and spent time across M and A and corporate finance in the UK before moving to the Cayman Islands and working in captive management. Yeah, I enjoyed my time in the Cayman. It was a unique mix of being exposed to new management focus and different nationalities. I like to think it as my working gap years and the bright pink Vesper and Flip flops made working days colourful, to say the least. It was in Cayman where I actually became interested in treasury, although at the time studying for the act, I was a little bit too logistically challenging. But when I moved back to the uk, I targeted roles with elements of treasury and that's when I became hooked, really.

When you say you discovered treasury then, was it just through local companies or how did you find out about treasury then?

So within captive account management, you're essentially doing everything. You're being the directors, company secretary, the treasury of the captives that you manage, and that's really what piqued my interest. And like I say, I like the niche and treasury is definitely that.

And then you came back and as you say, you start to think, right, treasury is what you want to do. What happened from there?

Yeah, so I had a few roles moving back into the uk, but most relevant is when I moved into the pure treasury and corporate finance role, which was focused at Drax, where I was for 13 years. And I was fortunate enough to see the company go through almost every change cycle a company can.

For the listeners who you know, some people in, certainly in the uk, will know Drax, well known, but international audience who are Drax, what do they do, treasury wise?

So Drax are the largest power generator currently sourced through biomass, they produce pellets in the US and they also service business customers in the uk. So they have a number of economic exposures, particularly perhaps in my sweet spot on the FX side, with being a UK company and sourcing fuel from the us, they have quite significant FX exposures and complex corporate finance needs across all aspects, from working capital, insurance, financial risk management, including FX inflation and interest rate management, as well as the financing aspects. So a good kind of covering of Treasury? Yeah.

And you were there for sort of 14. Well, nine. 14 years. 13 years. Talk us through, how did you progress there? Just briefly.

I started as a Treasury analyst, moved through, I left as Director of Corporate Finance and Derivatives. At the start, there was only myself and the treasurer, an administrator at the time, so a very, very small treasury team. But as Drax grew and the strategy changed and evolved, the need to grow the treasury team was evident and when we left, there was quite a significant team. I can't remember the number now, but almost double digits of people covering all aspects, from cash management through to projects and cap structure. So throughout my time at Drax, I covered everything from implementing systems, developing policies, procedures and Controls, but also working on the debt, the insurance, the working capital and the risk management. So really end to end treasury and corporate finance.

And Lisa, one of the things I know that you're a big advocate or keen advocate if you like, for the FX Global Code of Conduct and you know, across the spectrum. What does that mean, you know, for listeners out there?

Yeah.

So at the start of 2020, I became a member of the FX Joint Standing Committee which is chaired by the bank of England. And then following that I was appointed as the UK private sector representative of the Global FX Committee. And as you say, I'm an advocate and the voice for corporates, amongst other things, in encouraging my fellow treasurers and corporates to understand the benefits of adopting the FX Global Code of conduct. Where FX is concerned is the G&ESG. It's a great example of how we can scrutin ourselves and regulate ourselves as treasurers. The code has 55 principles covering six key areas and it doesn't look to impose any additional legal or regulatory obligation. It's there to promote integrity and an effective function FX market by applying those code, those principles and key areas proportionately to for each market users. So I would implore everybody to look into the code and see how it can help your organization.

It sounds obvious, but why is that so important? Would you say to treasurers, is it just about the ethics and everything else about it?

Well, I see there's a few key benefits for corporate signing up to the code. Firstly, it provides a proportional best practice framework that everyone can use and look to without it being regulation. It also helps set aspirations or areas that can be developed or targeted as companies grow or change. And it should also provide a great framework for training new members of the team. Boards and shareholders should gain comfort that the right ethos and appropriate governance is in place. And by sharing your commitment, it evidences a deeper investment in the rigour of your overall FX framework, making it more resilient and adaptive as, as the company grows. And it also helps level the playing field, giving us corporates a more equal voice in the market. So yeah, there's a number of benefits. Not only that you're, you're showing that you're invested in, in governance and giving you a grounding in your policy.

Fantastic. Okay. And that's where you met with Chris and I was going to sort of jump into Chris's background because that's where the two of you sort of got together, got to know each other and everything else. Would that be right?

Yes. Chris probably gives a more eloquent description of Brax as well.

Not at all, not at all. I think you've done very well there. It's brilliant. I like. So Chris, if you would again same question, take us back to the beginning. How did it all start?

So I think so I again similar traditional finance route, broad finance route, so ACA for a few years and then moved into commercial finance roles at AstraZeneca and McCann Erickson, the advertising agency. But I'd always had a strong interest in financial markets and had a, I suppose a cognizance of treasury, if I'm being brutally honest, didn't really know what treasury meant at that age. And I'll be honest, having spent the last many years in corporate finance, I think it's safe to say that treasury is very different and it means a lots of different things to different people, which is why I find it very fascinating. But so after that I took my first treasury role at the VITA Group which is a private equity backed portfolio company, global manufacturing business which was based in or HQ in the north of England but also in Luxembourg and in Cayman as well. And that was the first, I guess move into treasury and actually it was more enjoyable than I actually contemplated. So I've come kind of been in.

That zone since and with that role and you were there nearly, you know, when nine years at Viton, sort of how do you develop and what was treasury like when you started? Because you started back in 2007, so a few years ago now, so quite. Treasury's really evolved a lot, you know, throughout that time.

Yeah. So you probably park into different baskets, if you will. But in that period it's, it's probably Vita was highly leveraged so we were 6 times 7x leveraged going into the GFC and we were one of the first organizations that felt the pain of what highly leveraged means when the economy turns you away. And so whilst that was immensely painful, it was hugely, hugely valuable and rewarding Going through a very, very major debt restructure and there's 102 financial institutions involved in that and then working through that process and all that goes with it, not just the debt but the implications for directors and the liquidity management and then the broader risk management. So that was a kind of the first phase. Then there was the group itself was going through, well, is P back. So it was going through a divestment phase. So managing that, managing risk. And also whilst at Vita I entered into an MPO for Canadian business which I guess I would say harnessed my treasury and corporate finance skills and, and I found that immensely rewarding since, and still part of that organization in a different role now. And I suppose that's more broadly around risk management in terms of development. I think the technology has certainly changed and there's a lot more processes that are slicker. That said, they can be challenging to implement. So there's always a lot of pains to get to a efficient process. But I think the, the systems can be a lot slicker than they were certainly when I started.

And then you, you left there as the treasurer and then you then joined Drax again. When you joined in 2016, what was the sort of, where was Drax in its journey then?

So Drax. So, yeah, I spoke. It was Will Gardner who was the CFO and he's now the CEO, but he spoke to him and he was, he sort of positioned the organization. So it was, you know, it was, in my mind it was a utility company in Yorkshire which, you know, wouldn't have, wouldn't have been in a good match for what I was pursuing. Yeah, but actually, as he articulated it, they were, they were just embarking on a major growth phase and a major transformation phase. And both those coupled with the very unique economic exposures that Drax has given. It's the world's largest biomass plant with huge, huge FX exposures. I mean, when I joined just to give a content that the mark to market on the FX portfolio was larger than its market cap. So, you know, treasury mattered and it was pivotal to the organization. And then I think quickly working with Lisa, we found a very, we found our way of operating that was, I guess we operated at high pace in many different routes and found, found it fascinating going through and, and managing the risks and helping the business go through that transformation cycle.

And with that risk management, was that then that sort of. The. The two of you are sort of. And not speaking for Lisa, but was that a shared love of risk management and all the different complexity? Was that where the two of you sort of overlapped?

Yes, I mean, to be honest, it was in pretty much anything that, that touched treasury, so to speak. So it was whether it was on derivatives or thinking about capital structure in, in different ways, but relevant for Drax. And then you were constantly. Because the organization was so. Is so unique in a good way. You're constantly sort of having to challenge a status quo and your own mindset of how you can approach things and then having somebody who's off a similar ilk of mindset that can, you know, be innovative and, and think through is, is Invaluable because one thing I found generally it's more accentuated in treasury is being on your own in a silo. Doing complex things is great, but it's, it's quite, it's quite difficult unless you can, you know, surface and challenge your own ideas and get people to, to help foster it, you know. So having that sort of capability to work together and with the wider team as well is, has been super helpful.

And then I don't know if to pass to you or you know, this again my first ever two hander sort of thing with the two of you. I mean going back to Lisa then you guys decided to sort of give the microphone if you like, back to Lisa. You both decided to work together or how did it come about then?

Yeah, I think Chris covered it there. The key is that we play to each other's strengths at dk. We say we have complementary differences which many that work with us would probably both laugh at and agree with. We tend to get to the final answer through very, very different route with a bit of friendly debate and quick iteration along the way. But I think the way that we worked together really gave us that foundation to be able to move on and share the way that we approach things in treasury risk management and corporate finance to others. And that was the grounding for dk.

Can you explain what Dukes and King is?

It's many things to many different people I think is the answer. So Dukes and King, we focus on all things treasury derivatives and corporate finance with a particular focus on financial markets and the management of risks. From there we are embedded within organizations as the right hand, I suppose to the CEO, CFO and the treasury team to fill in their bespoke needs. And that might be very different for each challenging risk. We use our experience to provide them with either solutions or ways of working which they perhaps haven't explored before, either looking at a specific risk or the treasury as a whole to meet their needs essentially.

And Chris, when we spoke, but we had our pre podcast call, you know, we touched on the fact that Lisa's talked about being that extra hand if you like, but we were then exploring about when people should call you and a lot of the people were calling you too late or not too late, but maybe they should have called you earlier because then it'd be more effective. Can you perhaps explain that for the listeners?

I say early is better, but late still good. So that's good. I think that what, what I was trying to, trying to articulate is, you know, whether it's.