PwC believe that, at the highest level, corporate treasury’s purpose is to “be the custodian of of cashflow and financial risk within the company”. But how? What are you going to do and not do? Every corporate treasury department needs to ask “What is our mission?” Even for the corporate treasury departments - big and small, this has to drive everything else. 

Corporate treasury evolution

Many consultants, bankers and corporate treasurers have tried to summarise the dimensions and maturity stages that corporate treasury has gone through. The latest, and certainly one of the most elegant is, PwC’s Treasury Maturity Model:

Source & Copyright©2017 - PwC

PwC are correct in stating that the objectives of corporate treasury have evolved :

1. Safeguarding assets
2. Minimising cost
3. Maximising shareholder value
4. Impacting business strategy.

But the term ‘Strategic treasury’ does not reflect maturity, it reflects the need for a glossy term, not reality. 

Business Driving Treasury 

What the superb, the really useful corporate treasury department does is focus on the overall results of the business and how they can contribute to the company’s long term, sustainable business results. The maturity phase that corporate treasury is in today is not strategic, it is: ‘Business Driving Treasury’, no longer are they just ’Value Adding Treasury’, they are helping to drive the business. Being strategic is a small part of this. Today’s corporate treasury includes helping to focus the company’s strategy and direction, but also by practical initiatives across many facets, both financial and operational, of the business.

The great corporate treasurers today are business drivers first, and corporate treasury people second. The first task is to: work out what your mission is, where do you really want to take your corporate treasury department? The rest is detail.