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Does corporate treasury have a purpose?

Chris Skinner in his blog last week asked What is the purpose of a bank? He wrote “It’s a simple question: what is the purpose of a bank? However, the answers I get are often missing the mark, imho. I get answers like to fund business, to finance progress, to support the government, to keep economies stable, to manage risk, to build communities, to allow people to be secure, to enable trade and more. These answers are all true but, for me, the heart of banking’s purpose is to make societies better.”

This is heavy philosophical stuff, but it matters as the global economy moves into survival mode and as companies really need to focus on sustainable operation, e.g. Microsoft has set themselves a target of getting rid of their whole CO2 impact since they were founded in 1975.

Corporate treasury department objectives and mission

Martin Lewis, the UK consumers’ adviser on all things financial, advises money mantras to help people control/rationalise their spending:

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Corporate treasury is not quite that simple, but most corporate treasury departments have a clear view of their objectives/mission of what they do, for example:

  • ensure liquidity to fund operations and provide stewardship over the global capital structure
  • manage a portfolio of financial risks and provide services to minimize exposure to certain financial and operational loss
  • provide professional stewardship of financial assets to manage risk and return within approved parameters
  • provide a low cost, high-quality global transaction processing platform and enterprise solutions that support business profitability.

Other corporate treasury departments talk about the need to:

  • provide financial risk management and stewardship over financial assets and liabilities to enable the corporation to achieve its Objectives/Mission
  • identify, monitor and manage our financial risks and to seek to protect its profits, cash flows and assets.

Corporate treasury department purpose

But what is the purpose of a corporate treasury department? Does a corporate treasury department really have a purpose? Some argue that the corporate treasury is just a function within the company and no more than that, but there is much evidence that corporate treasury is much more fundamental and essential than that, as it ensures the very survival and efficiency of the company.

Using Chris Skinner’s assessment of a bank’s purpose as an example, could the purpose of corporate treasury be said to be, “To ensure the survival of the company sustainably”?


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