Erik Smolders talks about moving from regional treasury roles to managing global teams and his work advising companies at Deloitte. He discusses how companies centralize treasury operations, what corporate finance teams actually do, and when outsourcing makes sense.
Perhaps explain for the listeners that move from Europe to the US and you know how that changed you and, and also what it was like as a Treasury experience for you having come from Europe.
Yeah, no, I. So first of all moving from rainy Belgium to sunny Southern California was, was like a no brainer for me. But it, yeah, it elevated me from, I mean having been a regional treasurer and I spent a year in Singapore looking after the Asia Pacific treasury there as well. But it elevated me from being a regional treasurer to the corporate treasury position. It's then less about the regional treasury stuff and the cash management. So I started learning other things that I wasn't exposed to before when I was a regional treasurer, things such as managing more from the corporate side, the corporate relationships with the banks. What I found really interesting is the relationship with the rating agencies and seeing how rating agencies look at the world. And then I also added risk management insurance to my role, which I hadn't before. So that was managing the company's insurance portfolio which was new. And the other that I found exciting thing was being able to have an impact to things like policies and procedures from a corporate point of view. And then working on things with like share purchases, which is more a corporate function you are not exposed to from a regional point of view. And then the interaction with the board, which I also found very exciting to see how the board looks at corporate finance as a whole and treasury in.
Particular, managing big teams, global teams. You had a very international background. What was your ethos behind doing that?
I tried to speak to my colleagues around the world in a very frequent basis, help them out with, tried to give them a corporate view of things when sometimes you have to change policies, make changes to things that may impose bank relations, maybe things that are not what the local guys want to hear. So I tried to have a frequent dialogue and explain the corporate view in things that I did. Now one of the things I did which was maybe not so good from my colleagues around the world, but when I looked at things from a corporate point of view, we started centralizing treasury on a corporate level in the sense that it was part of the sort of the political climate within the company that created that opportunity. We started centralizing treasury and run treasury on a, from a global level. I think the technology was ready to do that and the environment was ready to do that. And we built a global team which, which kind of shrank my overall team and the colleagues I had around, around the world. But we were able to be a lot more efficient in global cash management by running it out of one team globally rather than the traditional decentralized teams where we had a European treasury, an Asia Pacific treasury team and a Latin America treasury team and a US or North American corporate Treasury team.
Tell us about Deloitte maybe and your role there.
Yeah, no, I had a great opportunity to move to Deloitte and be a Treasury advisor. So rather than now running Treasury I'm advising people in how to organize their Treasury. One of the things we do at Deloitte is that we have a call it treasury outsourcing although we don't like to call it treasury outsourcing but we have a function where we can run day to day cash management, bank account positioning in cash management on behalf of corporate. So if found that a very interesting opportunity to help implement that as a solution. So it's a way to take some of the day to day activities around cash management out of the company and kind of outsource it and do it and have it done by a team of professionals.
