Navigating the Cultural Shifts of International Treasury with Stephen Harper

Foreign.

Welcome to this week's Treasury Career Corner podcast where I'm rejoined by the lovely Steve Harper. Steve and I spoke way back in June 2020. We are two years later. We decided to bring the world up to date of Steve and the world of treasury and the things that have happened in the two intervening years. Quite a few things. He was originally then at NIDEC Europe. We're actually going to bring that up today as well. You can talk to, you listen to him if you like, about what's happened in the meantime. Hope you enjoyed today's podcast and you'll hear the original podcast and then, well, the update, the recap if you like, and then we talk about the future of treasury once again. Enjoy the show.

This week's show joined by Steve Harper, General Manager, Treasury Europe at Neideck Europe. Now, some people might not know nidec NIDEC are a integrated sales company based in the Netherlands comprising nidec, nydex Servo, Techno Motor, basically centered around communications, home appliances, industrial equipment. So, you know, sort of a specific niche group as it were, but very international and everything else. I'm actually going to get Steve, as usual, to explain a bit more about NYDC later. Steve and I have known each other for many years. We were just talking before the show and spoke a couple of days ago. A lot of the guys I interview on the show in the U.S. for instance, well, they'll start out in banking and they'll make a move into corporate treasury, discover it through their clients and so forth. A lot of UK and European guys tend not to. They go straight into corporate treasury or accidentally move into IT stuff. Steve's not slightly unusual in that regard. He started off in banking, treasury or banking rather in the UK before discovering the wonderful world of Treasury. Steve, as always, enough from me, perhaps explain how you speak starting off your career if you would, and then let's go all the way through to now. Over to you, sir.

Yeah, thanks, Mike. So yeah, I think sort of after university I sort of probably fell into banking as opposed to, you know, seeking it out but realizing that, you know, it was a very solid good founding sort of as to my basic finance knowledge, if you wish. But I soon found that the UK banking sector was rather limited in what it was trying to achieve with its so called graduate management trainee programs. And so I moved across through a number of American banks and then through into American bank commodity houses. So when you find yourself in that situation in the early 90s, it was a relatively dangerous place to be. But having sort of gleaned a really fairly wide experience through the sector. I actually decided to move into corporate and I made a very strong commitment to myself to move abroad. That being said, I jumped in a car and back then I took the ferry and I went to Europe and I sought out what I hope would be viable opportunity. That was back in the day that was Merck Sharp and Dome nsd. They were based in Belgium and then subsequently in the Netherlands and I worked for them for a number of years.

And why just jump in there? Just because again, that's quite unusual. A lot of UK treasury folks will pursue their treasury career as they can do all the way through and stay within UK groups and things. And again, this was back in the 90s, so there was early days of Treasury International per se. What was that drive for you? Was it just something you bit of a wanderlust or what was the situation there?

No, it wasn't that exactly. We could talk about this all day. But UK Treasuries back in the day were very much cash, FX and debt. So they were, I wouldn't say they were ivory tower, but they were somewhat staid and they were somewhat sort of financially regulated, more a subset of a generic finance function. And what you had on the European continent was the first sprouts, if you like, of treasury that actually required a treasurer to spread his wings somewhat wider, to get involved into things that were outside of the three basic pillars of generic corporate Treasury. And by that I mean project financing, I mean working capital enhancement, I mean a lot of greenfield development as a number of the European operations were seeking lower cost blue collar input into their manufacturing. So I probably was one of the early adopters, if you like. And you might ask me why I would then leave someone like msd. And I can answer that very simply. I left MSD because my learning curve was becoming somewhat one sided. Merck Sharp and being in pharmaceuticals are an incredibly profitable company and so much of my treasury skills that were being developed were on the positive cash side. And I thought that in order to make myself a more rounded individual, I needed to go and work for somebody who desperately needed money as opposed to somebody who had a lot of money. So that sort of took me down to the flextronics of this world. Probably one of the biggest companies that nobody's ever heard of that is an outsourced manufacturer and works on 11 1/2% margin making electronic equipment for everybody else around the globe. And that involves serious complex funding strategies, it involves working capital management, it involves new efficiencies and those efficiencies sort of take you across the border from pure finance into what I would call financial operations. And indeed, one of the first things I noticed at that point in time was that I no longer had an office. So I stopped working in an office and I actually moved myself and sat on the factory floor because my boss, CFO at the time, would always be very fond of telling me that if I couldn't see where the excess and obsolete was inside the factory, then I couldn't actually see where my cash was. And as the treasurer, that was my problem. So having done flexibility and Flextronics, being a truly global company, so I was a part of moving operations from Ireland to the Czech Republic, from Austria to Hungary, from Sweden to Poland, ultimately from Hungary to the Ukraine, this also transpired that we were moving from Japan to China, we were taking a lot of European operations down into Malaysia, and indeed, we were moving operations from the likes of California across into Mexico. And that meant that I was traveling 90% of the time. I had offices around the globe because we were always trying to apply best practices wherever we learned them, to our other factories. And as such, you know, the company sort of profited from that very flexible workspace allowance that it gave its employees.

And with that international exposure, if you like, you're meeting these, you know, so. And again, for the listeners, Flextronics, headquartered in Vienna, but we're covering California, doing China and stuff. How are you finding the differences in attitudes towards treasury and, you know, at finance and sort of, what was it like with that international? Because you were truly, you know, traveling the globe.

Yeah. And I. I think at that point in time, you. What you notice is you notice who are the early adopters. And the early adopters are those typically who need to adopt quickly when your margins are that low and that small. So the European businesses were being driven by people like Alpertel and Philips and Ericsson at that stage, all of who were struggling to come to terms with what was a much more multicultural environment that didn't have so many borders. Don't forget, Mike, this is the very early days of everybody moving their manufacturing to China, everybody setting up their shared service centers in the likes of Chennai, India and Mexico. So you saw very advanced techniques within Europe, and you saw a lot slower adoption within the US because it didn't need to move as fast. The US still had its own supply chains in place, and it was very tried and tested. It didn't need to look too far beyond. And it takes a global downturn to really make people appreciate or see that their cost structures perhaps need to be amended.

And then you, you did that for a number of years and grew the sort of function and things like that. But then you thought, yeah, Vienna to Australia, like you've made some great moves. So, you know, that's one of the things we wanted to focus on, the cultural shift in treasury, what was it like? And then make a move.

Yeah, so that was an interesting one for me because obviously I'd been at sort of the cutting edge of what treasury had to offer because as I said, the margins were so low. I mean, without being unkind to Australia, Australia was running about seven or eight years behind the likes of California and Europe at that stage. And I was asked to go down there to the world's largest packaging company. And Australia is a huge continent by itself, but it still was looking very much at Australian customers. It had four banks that were all A rated, it was safe, it was rich and it was somewhat stagnant. Now ultimately, if you're going to remain more than just one of the shining lights of the Australian pension funds, you need to move and adapt. And one of the things I needed to do was to take what Australia had, effectively move it to Europe to create a European treasury center so that the changing dynamics of the business had the infrastructure there to cope with it when it arrived. So I went down to Australia, taking with me basically experience that was maybe five or six years ahead of what they had. This was a time when Australians typically did Australian bond issuance. They didn't do private placements, they didn't do Swiss private high net worth individual borrowing. They didn't even consider really issuing money in anything other than Australian and perhaps occasionally looking towards the US dollar. But that meant that their underlying assets weren't really being adequately mirrored by the financing they had in place. It was an out of date loan portfolio that they had that needed to sort of be updated and revised and the maturity profiles sort of reset, if you like.

How did you find the teams different? Because by this stage you'd gone uk, you'd gone Vienna, know in Austria and certain cultural things, but then exposure other areas, then you're in Australia. What was was it the treasury teams like? Because then also wanted to sort of pick on that within the move back to Switzerland. And so they said, so, you know, just go through the sort of the team culture sort of move.

When I first started out, particularly sort of Belgium and the Netherlands, you're never going to find just people from Belgium or the Netherlands. You're going to find Spanish, French, Germans, you're going to find everything. So it's very multilingual. It's a different facets of experience. If you think that a lot of European colleagues go to technical universities as opposed to purely, you know, learning economics or accounting or finance, so you get a different skill set, you probably get a lot stronger analytical base, but you probably get a slower development chart. And what I mean by that is a lot of my male colleagues would have done either military service or its equivalent. The overseas educational structure sometimes starts later and finishes later, particularly in the German speaking world. So you find more mature, more technically able individuals who perhaps have less experience than you might be used to. So it's a different fit when you get down through Asia, you know, with, with Flextronics, my offices were in Vienna, they were in Brazil, they were in the US and they were in Asia. And you get different people everywhere. Probably the hardest region to, to work is Asia. And that's purely cultural where people are, you know, incredibly polite, relatively subservient, probably have worked through one company for most of their working career. So you don't get the sort of bounce back that you would find in an American or a European workplace where people are very forward offering their opinion so they're more reticent. So it's harder sometimes to read the group. In Australia you get 100% Australian workmates. Yeah, but what's an Australian? Right, because effectively that means they're an Australian Greek, they're an Australian Italian, they're an Australian German and Australian English. So you get the underlying culture, but you don't. It's not immediately obvious. The security of the environment in which they work means that people are less committed to the company and more committed to their career path. I would say that Mike, and then.

Just talk us through the next few moves because for people listening, again, they might not know you made some really interesting ones internationally, which again, you've let treasury truly take you around the world. You know, I remember when I first ever started in treasury recruitment, I like the idea of maybe you can take us to different conferences with wife and kids and things like that. And it truly has, you know, we established a business for, we did a lot of stuff in Asia Pacific. That market went down, our US business is flying. And so again I do a lot of speaking when it's not casual, canceled from various viruses and things like that. But you know, we've had, you know, it's due to be doing Texas, Chicago, New York, and we will do a lot of Those speaking years later on in the year. But the great thing with treasury, it's a truly international language. International language of Treasury. I love that one, you know, with.

You write that down.

Yeah, I'll copyright that quick. You know, so with yourself and as you walk through, you sort of went, you know, you did. Melbourne, Australia, Switzerland. Australia, back again. Was it just for the air miles?

What's going on? Yeah, obviously nothing beats a good 26 hour flight, right?

Yeah.

To be fair, what I did when I was initially in Australia, as I. As I sort of alluded to, we had to build European and international treasury centers. And as such, I built myself into a role in Switzerland that probably needed me more than Australia and hence stayed in Switzerland for a while. I ultimately got headhunted by the major competitor of my original employer back in Australia and I went back. I mean, in hindsight, I think that was probably a mistake. There is a term that they use called boomerang poms, where people who emigrate to Australia always want to come back to Europe and then they always want to come back to Australia and so on and so forth. You know, the lifestyle and everything you do and everything you can imagine are so incredibly different. It's almost like living two lives. But for me, the moves that I've made, I've always stayed very close to manufacturing, I've always stayed very close to heavy manufacturing and I've always stayed close to companies that are either evolving or migrating or in some respects have been in some degree of distress. And that's what keeps you challenged. Because the great thing about treasury is, and the reason that it is so marketable is that it's a skill set that is forever expanding and then better than that, you never have to do the same job in the same office with the same people every day. Right. So, you know, it's like you're taking it as an armoury sort of, that you take with you and you know that wherever you apply it, the situations might be slightly different, but if you've covered enough breadth and depth, then you can slot right in. So, I mean, treasury can be very plug and play in that regard and.

Then just talk us through then the moves, you know, or bring us up to date really, because then you went into consulting and they had some great experiences there. Again, for the listeners, you know, what, what would you say to them? Because we have a variety of different listenerships, we have found a lot of people in UK and Europe tend to be more treasury managers and senior treasury analysts learning the way up the curve and wanting advice from you about that to do versus in the US and further afield, they're a little bit more older and they want to hear some of your war stories. And I think you've alluded to that a little bit there. But you know, just, just going back with that, you know, you made these other moves talk us through the rest of it.

So I think, yeah, I mean, I think, you know, some people go back and do an mba, some people like to, you know, move on to universities and teach. There comes a point when your corporate experience really becomes about looking at your next title or your next pay rise and it doesn't really become about your own development. The reason I went into consultancy was that the consultancy I was doing was primarily driven by pe. And the great thing about private equity is that you're basically either doing an acquisition or you're doing a divestiture or you're doing a health check on a company that's already within their portfolio. So it's very short, it's very punchy in many respects. The things that you would do in a corporate treasury over an 18 month period, you're doing within a PE backed, owned company within a matter of six, eight or 10 weeks. So it really sort of reinvigorates and refocuses as to what is truly important if you're going to strip down and run with or divest from huge corporations. Those parts of the business that are non core but in effect are still very big and very interesting in their own right. So the consultancy is like a breath of fresh air really. It sort of, it wakes you up, it refocuses you, it sort of gets you really excited and reminds you why you were really excited to begin with. Then from the consultancy aspect, you're then ready for your next move. You've sort of, I don't know, that consultancy forever would have been. For me it is very demanding, it is very demanding on travel and very demanding on time. So you know, there's a lot of 20 hour days and there's a lot of time, you know, when you're six or seven weeks away from the family just because you're working on a, on a project timeline. What I've done most recently is I've come to the Netherlands, which is a great place to work, irrespective from where, wherever you come from or whatever nationality you are. It's very liberal and it's very embracing. I work now for a major Japanese corporate that is probably the, or basically the world's largest maker of electronic motors. Be that they're in the windmills or the electric cars or in home appliances. Again, a hugely different culture, a Japanese yen dominated culture. A culture that is not overly familiar with expanding and making acquisitions overseas. So a large part of my role is in M and A and is in expansion. NEDEC is a company that makes basically six acquisitions per annum. It's in a growth phase, but it's in a development phase. And that growth is taking place outside of its country of birth.

And with yourself and springboarding from that experience, what would you be saying to people? We're facing challenging times around the world and people are saying, oh, this virus and everything else, Treasury's prepared for it. And this is what you do. You guys spend your days looking at, planning for situations, situations. Then they come up and oh, hang on, press, press the button sort of thing. Now I know that you've used all that stuff in your back pocket if you like, but then bringing it to the fore. You and I spoke before that it's much more about integrating with the CEO, cfo, COO and things like that, and bringing the treasury to front and center. How have you done that and how would you know? What have you used from your past experiences to do that?

It's a very good point. I would say, Mike, that even 10, 15 years ago, treasury was always a subset of finance. And when you sort of read an advertisement, perhaps coming from yourself, it would have said that you had this cross fertilization with tax and accounting and finance. And I think that's no longer the case. I think very much now my cross fertilization, to use a term I don't really like but is with procurement. It's certainly within sales, it's certainly within inventory management. And I think that the corporate treasurer has become a corporate crossover into operations. I mean, if you look at where, you know, it's very hard to find an area now where you can really make a huge difference. Now, once upon a time it would have been securitizations, it might even have been receivables factoring. Now people look at the supply side. Everyone's very concerned with the supply chain. Everyone's very concerned with inventory management. A lot of the accounting changes have made some of the more exotic solutions a little more unpalatable. So you really have to work with, you know, the guys in departments that you once might never have thought about visiting in order to get treasury up to date. I look at excess and obsolete inventory numbers, I look at inventory turns, I look at inventory breakdown as to whether or not it's raw material, work in progress or finished goods. I look at logistics and when you, you know, and that all brings in commodities, you know, so commodities are a much, much bigger part of the treasury portfolio than it ever used to be. There's very few things manufactured out there that don't have copper, zinc or aluminium in them. There's a lot of people looking at their footprint. So, you know, whether or not transportation costs are something that you should be taking into account. And ultimately, when you're in manufacturing, I think that people look at you now as to the footprint that you leave. So I think you and I both know, Mike, that very soon the likes of your S and P and Moody's ratings will take into consideration your green footprint, not just your financial footprint. And so, you know, when I'm looking now to issue bonds, you know, I go straight to the green bond market. I don't go anywhere else because the green bond market allows me to assist the company in other ways in terms of how it's perceived or how it promotes itself. And we're just very lucky that being in electronic motors, we qualify in a number of those categories to be able to issue that. But it's important. Yeah.

So let's look at you for a moment and just on that, this is, we wind up today's show, you know, looking at the, the future for Treasury. You know, that was a great, a nice segue actually. We didn't actually do it on purpose, but, you know, where do you see this sort of future Treasury? You touched there on the sort of green stuff coming in. But what other things are you thinking? You know, we, I sometimes say on various shows that the CFO is using the Treasure as their scout, pushing them forward and things like that. Is that something that you, you see yourself or is that, is it. What are you seeing the future role of the treasurer, as it were.

It's a good one. I think if I could answer it in two ways. Number one, it depends on your cfo. It depends whether or not you have an inward looking CFO or an outward looking CFO. A lot of CFOs are either ex treasurers or frustrated treasurers. And a lot of CFOs are accountants who don't want to be overly involved in Treasury. What I would say is that I think treasurers are becoming more involved in the business per se. Really good example of that would be customer contracts and supplier contracts. Once upon a time they would have just passed you by. But now, of course, you're looking for embedded derivatives. You're Looking for whether or not you're purchasing in the right currency. Are you moving the foreign exchange exposure to the level or to the counterparty who's best able to cope with it? So you think it's very normal that you're charging your suppliers in dollars? Well, if you charge them in renminbi, would it be a more advantageous price to you? Would it remove some of the pressure of the foreign exchange exposure on the supply chain? So you're becoming much more integral. The customers, you take on the suppliers, you take on the supply chains that you're building. And I think that's a good thing because we may as well be blatantly honest. Mike and I would say that what used to be the three pillars of treasury, cash, FX and debt, they're not that complicated. If you learn them, you know them and the interest factor that surrounds them. Albeit you might be implementing a new treasury management system or you might be managing a very large risk portfolio. Those would be specific treasurers. I think the widening of the remit into the business is good and I do think that you'll find yourself, as you move forward, a much more of a link pin, almost a link pin between a CFO and a coo. And that probably, if we're going to approach an end to this conversation, makes a much more attractive future for what is deemed to be a corporate treasure.

So I think a lot of the time the treasury nowadays, and as I've seen it evolve in my treasury recruitment career has been as you talked about those, those three pillars, you know, of treasure and then it's about everything else you do now. In the early days, that was what. And that's what I learned, cut my teeth on. I remember first ever asking about you one of my treasures about lockbox processing 20 years ago. Oh God. You know, but then once you learn all about that and then you learn the next levels and things and you know, got to know that then treasury is about so much. It's about the integration with the business. When I'm recruiting, I'm recruiting this big role, as we know for in Saudi Arabia, corporate treasurer. And it's actually about. There's a lot of assumed. Well, we know the person is going to be a complete subject expert. They're going to know all those different areas that's already a tick in the box. That's by the time you've been 20 years in it, they assume you've been around the block and you've got the progression. It's all about everything else. And you know, bringing that into the sort of. To close today's show, if someone looks at your LinkedIn profile and they say, do you know what? I want to have a similar background to Steve, I want to do something like that or follow tech around the world, what are the tips that you would give them? And again, we'll put your LinkedIn profile in the show. Notes, what tips would you give to people?

I would say, firstly, I think I would follow your desire to learn. I would say there's an old adage, right? If you're under 40 and you don't move every four years, you're crazy. If you're over 40 and you move every four years, you're CRAZY. But I don't quite buy it. I think industry, jurisdictional, social experience, at the end of the day, a good treasurer is all about breadth, depth and it being supremely flexible. And even if you're doing a very similar remit, you will do it very differently in different places around the globe. You'll know when to stop. And funny enough, as you know, Mike, there aren't many people who carry on in treasury as long as the likes of you and I, and that's because if you're getting it right, you'll still love it and you'll still stay in it. I'm almost saying that if you get it wrong, you'll move on, you'll graduate, you'll cross over into something else and that's fine, too. A lot of people like to move into FP and a, A lot of people like to become a cfo. But I honestly think that if you want to stay away from the pure accounting side, then I think treasury probably offers you a much more interesting career. And I've never been limited by borders. I only go where the job is. I only go where the most interest is.

I think that's exactly right and I totally agree with you. And actually, it's funny, I think you can use treasury as that springboard, if you like, can't you? And it's, it certainly springboarded your career into all different countries and different roles and different, different things like that. And I think anyone who's in it now and thinks, oh, actually I could go, yeah, go to those other, explore those other areas. You might come back to treasury one day, but it's certainly in more limited fields. You just become a specialist. Whereas Specialist Treasury. 20 Years Ago, you, you know, I'd expect people to finish as treasurers. Now I don't anymore. You know, I see so many people that sort of on LinkedIn profiles, they sort of update themselves. They move to this, or they move to general management, or they're off to this, you know, new exciting events. And I think that's so much better for the profession as well.

So I wouldn't be at all surprised if 50% of treasurers, following the route that I would follow today, find themselves in more generic corporate management. But very possibly it won't be in financial management. It will be running the business.

And 20 years ago, that would never happen. You know, I never saw that at all and you know, when I first started. So now you're entirely correct.

So, Steve, thank you, sir. Great, great words from there.

Steve there. We'll put his details in there. You'll have some show notes. Great talk through his international career. Thanks for your time today, sir.

You're more than welcome, Mike. Anytime. Take it easy.

So I hope you guys enjoyed that amazing conversation with Steve now. Wow. We had that back in June 2020. So as I sit here, that's two years ago. I wonder what's happened since then. Just a couple of million things. When Steve, as you heard, was with nidec, he was based in Europe. And I've got Steve back on the line. It's amazing. Good friends, I'm looking forward to this update show if you like. But it's more also a springboard show if you like, because Steve's rejoining us. He's now with Teva Pharmaceuticals. I'll get him to explain who they are, where they are, but they're over in Israel. And lots of different changes. Steve, I'm not going to take any more away from you. Take us from, if you like, from nidec. And when we finish the last show, as people have just heard, bring us up to date because it's a fascinating story, as you and I have both discussed. But back to you, sir.

Yeah, no, thanks, Mike. At the end of 2020, I was approached by somebody I'd once worked with in the distant past to see if I might be interested in taking up a position for Teva Pharmaceuticals. It was an interesting discussion, and that was it at the time. Then as things progressed, I realized that in order to take up the position, based on the seniority and all direct reports to the CFO have to be in one place. That would mean that I would have to move to Tel Aviv, Israel, which not being Jewish and not speaking Hebrew was somewhat of a challenge. But I decided that it was something I should look at. I think you and I might have discussed it before, but there's a couple of Things that are very important. I think people are becoming increasing, increasingly selective about the type of company that they work for. And for those of you who don't know Teva, I mean, basically it's been around since the 1900s, but it's a generic pharmaceutical company, one of the biggest generic pharmaceutical companies. The tagline would be that 200 million people in 60 countries take a tether medicine every day. And generic medicines for those who are not aware mean that we're providing the lowest cost cost medication to the world's widest populace. It sits well with me as to what they were trying to achieve. And I thought, well, that's an interesting journey in itself. And the second thing is when you've done treasury for as long as I have, I mean, you need to know that there's something there that's really interesting. And this was a company that came with a history of some litigation that ran through about 2016. It had once been been one of the doyens of the Israel commercial sector. It had gone through tough times and transformations, but really it was the very start of large manufacturing companies joining the journey of esg, so joining the green journey, as it were. And my role was meant to be pivotal in that direction.

Steve, it's a heck of a move from the Netherlands to Israel. You and I have talked about this. You've been there over 18 months now. So there's the transition to that, but also the transition in terms of treasury per se. And treasury transcends the globe. We know it's an international finance discipline and everything else, but the listeners today, if they get a knock at the, you know, say, oh, look, we, we've got this opportunity. They might, I'm not, not sure about that, but you've told me some amazing things about the company and the location. Can you just tell the guys why they should consider it?

You know, I think, number one, you never want to stop learning. And number two, if you're able, you should utilize the fact that the cross fertilization of skills, wherever it might be, is always going to be of benefit. Now for those of you with young families, they're very young, take the opportunity and go. I took my kids on the road before the ages of about 9, 10 and you know, never did them any harm. If you've got kids in exams, of course you're not as mobile, but if the opportunity comes along, what you will learn about treasury in China, let's say in trust loan structures, what you will learn about treasury in Japan, you know, with a restrictive regime on how you move money cross border, what you'll learn in Russia, what you'll learn in the United States, Brazil. And so the list goes on. You will always learn something that you can apply somewhere else. And one of the things that I swear by in treasury, it's never enough to actually know about it. You actually have to have done it. And I think most CFOs will make the remark that the weakness in their senior management organization is that people in senior roles can only bring to the job that which they're currently doing. Whereas the most important part is that.

Where they've been before and with yourself, this transition, this sort of development of the group. Exactly as you talk about very successful group over many years. And you and I, we'd had this pre discussion recently about the fact that you come in and you've linked and everything is linked to ESG. Now. I was talking to someone actually just today and they were saying that they were at a conference and they were the moderator and there were a number of challenging questions coming up on the screen and they had to be careful about how they went to the audience, how they answered some of these, because some of the questions weren't appropriate or, and, or weren't prepped, you know, so they didn't want to just spring it on someone and sort of things like that. But you have really deep dove in that area and everything else. Can you explain to the audience how that again, has shaped it? Because everything that you're doing seems to involve it?

Yeah, no, I think that's fair. I think, number one, Teva carries a fairly subsizable amount of debt, which means we are frequent visitors to the bond markets. Frequent, I would say, every two years. And we make sure that we proactively address our upcoming maturities of our debt portfolio towers, if I can put it like that. And I think when you're on an ESG journey, the company has to be on a journey anyway. We're a manufacturing company. Obviously our greenhouse gas emissions and our other component parts of the journey are well known holistically. If you look at how you fund your organization, for every X dollar that's available to you, there'll be an X plus a Y component available to you should you meet certain ESG criteria. That is the banks and the bond investors have bigger buckets of cash if you meet the criteria. I would go as far to say that if you're trying to raise money in the European markets and you're not compliant on ESG journey, you will be restricted by many of the investors who cannot have you in their portfolio. I would also say that whilst Speaking to me 12 months ago I would have said the USA is five to seven years behind. Speaking me today, I'd say they're about 18 months behind. Behind and being a 5050 debt raiser of dollar and euros. You are seeing the US play catch up. You are seeing the rating agencies want to build your ESG credentials into your generic credit rating. You are seeing your banking partners demanding to see your ESG credentials or criterias. So it was a natural move. But for a company that's non investment, investment grade, based in Tel Aviv, that raises most of its revenues in North America pharma to try and raise 5 billion ESG link, it was unheard of and I'm glad we did it. And subsequent to doing it, I put a stake in the ground for all future bond issuances. Only a few months ago I actually linked my revolving credit facility renewal to subsets of the same criteria. So I've made, I've made the company's entire financial viability going forward dependent on it being a good corporate citizen, if we can put it like that.

We definitely can. And from that, if I can ask, you're a global multinational. We've got people listening today. That may be with much smaller organizations and everything else. And just when you were talking, saying it's all linked to esg, we were a smaller recruitment company, very specialist, a niche and everything else. We don't necessarily have an ESG policy because we do what we feel is right and we try and do our bit if you like, but in a micro scale. But it sounds like, you know, we have a diversity inclusion policy, we have all those different things, but it sounds like it's sort of going to cascade downwards as well. I mean, when you're listening today, you've talked about and they really impressed me and I went away thinking crumbs. Everything that Steve's doing has got that ESG element and it's not just the words of it. You know, you and I, we had a much lengthier conversation that we could have today. But again, do you think, as you see, the US is eight years and then boom, they've got 18 months and will, you know, catch up and go further. What are you thinking as well? You know, is there anything that people should be doing as they're listening today?

I think you're right, Mike, I think cascading down. But you can also, from the sentence that you just gave me, you can also think about rolling up because yes, of Course, it involves diversity and inclusion, it involves waste management, it involves emissions. But then if you want to push it a little bit further and you're not debt raising, but let's say a lot of very small companies have bank facilities, perhaps with one or more banks. You should or you can not. You should, but you can link the price you pay for that facility to how you perform around certain ESG criteria. Criteria or metrics. I would say that if you set the bar sufficiently high so that you pay a premium or you pay a penalty if you don't meet them within the time frame in which you said you would, that's a good thing. And if you receive a discount for having met them earlier, providing you don't get accused of greenwashing or having set the bar too low, I think if you promise to reinvest any benefits that accrue to you back into the journey, that's a good one. I would say to you, Mike, in your position, doing what you do, I would look at the credentials of your suppliers. Yeah, I would look at the guys on their wooden pallets or their bubble wrap or, you know, how far they travel and what mode of transport they use to bring you what you need. If you think of yourself as a soup to nuts or a cradle to grave, depending on which part of the globe you're sitting in, you just think, is there anything in that metric where I sit in the middle, or let's assume for this discussion I sit in the middle, that could either be better or I could change, or I could link my performance to meeting certain criteria so that I can be judged externally and held account externally by independent adjudicators as to where I am in this new ESG climate, it's very easy to be flippant and to say it's very fashionable. But now reverting back to my world, which is a global heavy manufacturing base of pharmaceutical product, base product and end product, and very large warehousing and very large usage of electricity and water and commodities, there's a lot I can do. And I think if everybody can scale what they believe they can do and don't take the product to be on the journey. Make sure you're on the journey and find the product that fits.

You're asking a minute about again, we talked about sort of the evolution of treasury and some of the people related aspects of things like that. I'll come on to that in a minute, Steve, but before I do, actually there's something that's just come to me as you and I have taught there. I'm interviewing and screening for my clients candidates every day. What makes a good ESG relevant Treasury professional versus someone that perhaps isn't as relevant or as thinks they are. You know, what's the differentiator? If you like to tell people, we will be, you know, be catching up for Steve as is overdue for a face to face catch up soon, which I look forward to. But before then again for the audience if they're also looking at people and treasury professionals. We recently recruited for one of the leading water firms in the UK and this the guy that was joining said to us before we even got in the role, said to my colleague Craig, I'm only interested in a role as long as it's an esg, you know, type focus because I feel very passionate about it. It's a big thing with him about renewables. That's a big thing on a purse, totally personal. And then he went, well, what about if I've got a deputy treasurer role at Water Water company that's at the forefront of this. You went, when do I start? But in general terms we've got a number of companies out there, environmental recyclables and things like that. But how do I find the candidate or how do I sort of screen them? What's the filter you would run past them? You've been at the forefront of this, so what would you be looking for more the candidate, if you like. This is a warning to you candidates out there. If you're listening today, there's two things, right?

There's you have two types of treasurer. You have treasury tech technical and you have treasury commercial. And treasury technical, I think is very much about when you're adding to your own personal stock. So if you're an analyst or a junior manager level, you're treasury technical. You're learning all the base skills that you need in order to do Treasury. Now once you've done cash management and foreign exchange exposure, that sort of ticks the box in I can be a treasurer. And then of course you move into risk management and you move into insurance and you move into investor relations and you move into what makes you a corporate treasurer as opposed to a company treasurer. I would say from my perspective, I look now much more at the commercial applicability of treasurers. I will just give you one old story, Mike, from a very long time ago that a CFO of mine decided to move my office from an office on an office floor and he put my desk inside the warehouse and he said to me, look, if you can't see your excess and obsolete. You don't know where the money is. So you can't be my treasurer. I always look now for treasurers who have a commercial leaning but if they have a manufacturing production supply chain leaning, that is the next additive that will make the next treasurer because the next generation of treasurers, particularly as we head into high interest rate and an inflationary environment, only people like as old as me and you might can really remember it's going to be how agile is your balance sheet or is your supplier and is your customer parking their funding needs on your balance sheet and you know how agile is your supply chain. I really do think that treasury has come an awful long way from cash and FX and that's almost now your base exam to get in. But it's certainly not what interests me. When you sit across the table and I interview you, it's much more your passion for the wider concept because you know that treasury is affected by logistics, treasury is affected by the supply chain, treasury is affected by customers, customer contracts, embedded derivatives. It's a bigger world out there. I would sooner take a generalist and make him a Treasury person than try and take a Treasury person and make him applicable. I do hope that doesn't mess up your recruitment.

The good thing is I also get then the generalists wanted to come into treasury and you know, and if they've got the relevant skill set but it's sort of. I'm following on from that. One of the things here, you know, and again, well maybe the. If the guys that haven't listened to this, you know, the question I was then going to push was how are you or are you prepared as a Treasury professional for this new world, you know, with inflation. Okay, tell me how. What are the ways in which you've prepared yourself or how are you getting yourself? And obviously they get the job if they say they listen to this podcast every week because then they'll be doing that ongoing and listening to Treasure as long as. But that aside and looking for yourself the future we touched on esg. We did this.

This is sort of.

We'll put your LinkedIn details in the show notes and things like that. We've already had some top tips from you before but how do you see the future of Treasury? What's next for you? And usually I sign off but I'm going to let you have the final words. Steve. I'm going to shut up. You'll give the final close off to the people and then we'll play the music. So over to you, sir, to close the show. No pressure.

What I would say is that in an environment where we could be heading for 8 or 9% interest rate rates, I think it's really time to review or revisit your organization and put very simply, look at your organisation and see if it needs to go on a diet. And what I mean by that is there might be more money inside of your organization at rates that you can well afford, because it's dormant or lazy, than you can possibly afford outside of your organization. So I think the next big thing is working capital efficiency and that can be supply chain, that could be securitizations, that can be asset management setbacks, that could be sale and leaseback. There has to be a look back in anger within the organization just to see is it as good as it can be before I start going externally and looking at money that possibly I can't afford.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen. Whether that's ignorant, itunes, Spotify or another great place to listen to the show from, it's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there, you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce every week it'd be amazing. Destate, say 20 seconds seconds. Leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.