How to Make A 21st-Century Treasurer

Anthony Glasby's journey to his current position as vice president and treasurer of EDS spanned half the globe and included stints in a variety of financial positions. He started in a graduate training program with the publishing firm Reed International PLC in the United Kingdom, working in the pension and investment group, among other areas.

In 1987, Glasby moved to EDS's London treasury office, where he worked in international treasury operations. He next headed to EDS's headquarters in Plano, Texas, to manage the finance team supporting the salespeople pursuing a global project deal. After that, he was a divisional controller for several EDS divisions operating in the U.S. and EMEA, or Europe, Middle East, and Africa. A few years later, he returned to the U.S. treasury office as assistant treasurer, later to be named treasurer in 2006.

Certainly, EDS's far-flung global operations remain fertile ground for developing the next generation of treasury professionals. Having wisely leveraged the global infrastructure of its one-time parent General Motors Corp., EDS has global roots that run far deeper than many companies twice its age.

Still, appearances can be deceiving in the age of globalization. Take Exelon Corp., a $15 billion energy company whose nearly six million customers reside entirely within Illinois and Pennsylvania. You might imagine that local weather reports (think air conditioning) remain a KPI (key performance indicator) for Exelon's finance team. Think again. The fact is that 85 percent of Exelon's profit is derived from the energy company's unregulated generation business.

This business, known as Exelon Generation, has profits that are today largely impacted by the price of natural gas, coal, and other global commodities, according to Exelon senior vice president and treasurer Michael Metzner.

"While we're not located or domiciled in many countries, our underlying business profitability is more and more impacted by global market trends," explains Metzner, who says that the impact of the global economy has grown as the firm has migrated from being a utility company with predictable earnings to an unregulated business with more volatile earnings driven by global events.

Meanwhile, when it comes to developing Exelon's next generation of treasury professionals, Metzner says that the most valuable experience is not necessarily gained from stints abroad. Instead, Exelon's treasurer says that the most valuable experience is time spent working alongside the company's stateside commodities trading, planning, or risk executives (see Metzner's interview "At Exelon, All Business").

Only here, as part of cross-functional teams, will treasury professionals gain the broader strategic insights required to help treasury play a greater role in their company's overall strategic vision, he says. "Today, treasurers need to know where the business is trying to go, and they need to create and execute financial plans that help their company get there."

Similarly, at EDS Glasby says that his team is routinely enriched by tours of duty outside the traditional treasury function. Members of EDS's treasury department work closely with different "client-facing" business units across the company, often by providing advisory services as the company pursues potential deals with clients. They'll evaluate the capital investment that may be required, as well as the potential foreign currency exposure. To do this, the treasury group needs a clear understanding of the company's operations and market, Glasby notes. "You have to think in a commercial context, so that you can effectively apply deal financing and risk management advice."

Successfully supporting other business units requires treasurers to develop relationships with their colleagues in those areas. While treasurers can't force the relationships, they often need to take the first step by, for instance, visiting a plant floor or sales office. "This is the only way to truly understand business operations and is also invaluable in forging relationships," observes Susan Hillman, a partner with Treasury Alliance Group LLC, Chicago.

This sort of cross-country, strategy-minded route to the treasurer's office is becoming more common, experts say. Executives at many companies increasingly demand treasurers with experience in international finance and a thorough understanding of the company's business strategy and operations, as well as the tax and accounting implications of funds movements. "The ideal treasurer has a well-rounded understanding of what's possible, and what can be done to establish treasury operations on a global basis," says Mike Gallanis, CTP, partner with Treasury Strategies, Inc., in Chicago.

This is a shift from a decade or so ago, when treasury often was seen as either a sort of ivory-tower department somewhat removed from an organization's actual business or simply a back-room function focused on bank balances. "The treasurer's role is expanding. They're no longer limited to dealing with just managing bank balances and handling banking services," says Hillman.