We organised a unique evening for members of the Future Leaders in Treasury group on Thursday 22 February looking at stakeholder relationships and how to make the most out of our interactions with financial advisors, software providers, banks and credit agencies.
We started the evening by asking the advisors about their day-to day-interactions.
George Karalis, Managing Director at Centrus Advisors, commented that for a financial advisor the key themes of needing to understand the portfolio and objectives of the treasury department, the need to add value and to act as a sounding board, were important aspects of any relationship.
In order to build a good relationship, he has found that all parties involved need to:
- build a mutual understanding
- have confidence in each other
- have the independence to look at results objectively
- trust each other
Within these four parameters it is important to work together, and to ensure that the consultant has access to any information that may help and add value to the decision-making process.
Sophie Gent, Associate Director at RBS, said the key aspects were that all parties were capable and credible and that they communicated effectively with each other – this is a two-way relationship. The relationship banker should be a trusted advisor, and the client needs to think about how they want to work with them and how they want to develop the relationship.
Matt Burgess, Head of Market Development, Europe at Visual Risk, a software company, said relationships for software providers depend on what you needed:
- Do you have a TMS you are using but want to make changes to?
- Are you in the process of implementing a new TMS?
- Are you looking at new TMS systems with a view to bringing in a new one?
- Do you have a TMS you are using and do you just need support?
His key message was that individuals can become focused on day-to-day operational aspects. It’s good to step back occasionally – don’t lose sight of the strategic benefit!
Geert Arlman, Director of Client Business at Standard and Poor’s, said the key to a good relationship was to build trust and to treat the rating agency as an insider. A lot depends on the relationship you are going to have and where are you with your rating? If you have a rating your primary contact will be on the analytical side, if you are not rated yet, your relationship will be with someone in business development.
The two key questions to ask yourself were: 1. Where are you as a business? And 2. Where are you going?
A rating agency can help by providing you with a rating, providing information and data (which they will normally do free of charge) and helping you to model your own credit policies on their research.
The second question the panel answered was about key attributes within the treasury team. The panel discussed various relationships they had had and decided that the key attributes needed for a successful relationship were:
- Information sharing
- Good exposition of your requirements
Talk to your financial advisor, really talk to them. Tell them about your challenges and objectives and where you want to go – they will listen and help you to get there. Take a holistic approach to the relationship – don’t see it as a sales conversation but a long-term relationship.
From a bank perspective there are two key aspects: openness and collaboration. If your relationship banker doesn’t understand your strategy they will not be able to help.
From a software provider perspective, a willingness to learn and an openness to change was essential. Things can change and you need to work with your TMS in order to make best use of the system. The best implementations and relationships have been built by individuals who have the right attitude and a willingness to adapt to things as they come up.
From a rating agency perspective trust and mutual understanding is key. Knowing what rating you will end up with as a company can be quite difficult. So by understanding how the rating agency works and what information it needs, you will help your company. If the agency is asking for something that you don’t have you should be questioning why you can’t provide this as they will not be asking for something that is not needed or that should not be easily attainable.
The discussion then moved on to what a treasury professional could do to maximise their impact with external advisors and accelerate their development?
The discussion focussed on a number of aspects, including:
- Be able to tell your company story. If you can show you understand this and can articulate it, it will give your external advisor confidence in you. As a more junior member of staff you may not be involved in the ‘big’ conversations but if you understand what is happening and can be part of the dialogue that will instil confidence.
- Produce work of a high quality – prove yourself.
- Ask lots of questions – this will show you have an inquisitive mind.
- Look at your personal brand – what does this say about you and is this what you want to be saying?
- Engage with those at your level in your advisor organisation – find the peer level you are at and talk to them. By building a relationship at this level it will enable good information flow.
- Listen to what your advisors are saying. Even if it’s not on your companies radar right now it might be something that YOU can bring up at a later stage.
The penultimate discussion looked at good and bad relationship examples.
When relationships are positive:
- All parties have spent the time to build the relationship.
- The relationship is based on openness, collaboration and honesty.
- Those involved commit to the project and work at it to make sure it is successful.
- For software providers, a key aspect is that the company helps in developing their systems. When reacting to bespoke requests they work with the provider to produce the best outcome. This will also help the provider to use this new development to help other clients.
When relationships don’t work as well:
- If you don’t speak to each other or understand each other’s objectives. You need to provide the context in order to get the best result.
- Projects need buy-in at all levels, and if only part of the business is engaged this can make it very difficult to implement/run.
- If a relationship only works one-way it can never be as successful as it should be.
- Lots of last minute requests can put pressure on the relationship.
And finally, the panel were asked what makes someone stand out in a relationship?
Geert Arlman, from Standard and Poor’s, thought anyone who had the confidence to be open and vulnerable stood out for him. Someone who took the time to have an informal coffee after a meeting to ask the ‘stupid’ questions and really understand what was needed also stood out.
For Matt Burgess, from Visual Risk, it was the ability to have a longer-term vision and to be able to articulate why. This is what the future company leaders are able to do.
For Sophie Gent, from RBS, it was someone who had behavioural and business skills. The Treasurer will have the technical know-how but those who know how to challenge, provide an opinion and get buy-in from all parties will be most successful.
And finally, George Karalis from Centrus Advisors, felt that anyone who was motivated and worked hard would succeed. Those who are very targeted and driven and who work hard to achieve the project goals will be successful in their careers.
The Future Leaders in Treasury group provide tailored content and information for ACT members and students working at a tactical and operational level. For further information please visit www.treasurers.org/futureleaders
Many thanks to Centrus Advisors for hosting the event.