Strategic Role of Treasurer Continues to Expand

Profession Becoming Vital Part of Corporation's Strategic Framework According to New AFP Research

October 16, 2006 - BETHESDA, MD - The treasury profession continues to grow, playing a greater strategic role within organizations according to a new survey conducted by the Association for Financial Professionals (AFP), underwritten by Citigroup. While treasurers have long been responsible for managing cash flows, they are now being drawn further into the strategic framework of organizations, creating new opportunities and responsibilities for the profession.

"Today's competitive global economy is causing corporations to reevaluate how they manage their internal resources in order to maximize those resources. Fueled by this, we have seen Treasury play an increasingly strategic role in the framework of today's corporations," said Jim Kaitz, President and CEO of the Association for Financial Professionals. "Today, treasurers fulfill a variety of roles from that of managing trillions of dollars in cash each day to non-financial risk management and retirement and pension plan administration. The results of this survey show that Treasury increasingly is becoming a dynamic and cross-functional profession."

Ninety-one percent of senior-level financial professionals responding to the survey indicate that the treasury department is playing a greater strategic role within their organization now than five years ago. Further, survey respondents expect this trend to continue, with 92 percent of respondents expecting treasury to play an even greater strategic role over the next five years. Fifty-seven percent of respondents indicate that this greater strategic role is driven by the need for corporations to leverage the diverse skills of the treasury department, while 47 percent respond that this increase is the result of an amplified cross-functional approach in today's corporations.

"Citigroup's focus is on delivering innovative solutions that enable treasurers to meet the expanding challenges of their roles," said Paul Galant, Global Head of Cash Management at Citigroup. "As a leading global treasury services provider, we understand that treasurers are now positioned to add value to their organizations through increased efficiency, revenue generation and risk management."

The greater strategic role of Treasury is not coming at the expense of the traditional cash management and liquidity focus of Treasury. More than a third (37 percent) of organizations have expanded treasury staffing in the past three years while nearly half (48 percent) have maintained the same level of treasury staffing. Further a third of organizations (31 percent) report they have increased the resources spent on the traditional cash management duties.

Treasury is also becoming more global in scope as organizations expand their marketplace internationally. Fifty-nine percent of survey respondents agree that their role is becoming more global. In 93 percent of organizations, Treasury leads the global cash management responsibilities while 90 percent of treasury departments lead their organizations' international banking activities.

Within their organizations, Treasury is participating in an expanding scope of responsibilities. Nearly all treasury departments (95 percent) play a role in financial risk management activities, and now three-quarters are active in non-financial risk management activities. Treasury is also an active participant in other "nontraditional" activities including acting as internal financial consultants (90 percent); assisting in mergers & acquisitions (84 percent); SEC compliance (84 percent); business continuity planning (74 percent); management of retirement and pension plans (70 percent); and management of other employee benefits (56 percent).

In order to manage this increase in responsibility while maintaining traditional treasury activities, treasury departments have relied on a variety of measures. In addition to the expansion of treasury staff, 27 percent of organizations have increased the use of outsourcing solutions, while 63 percent have seen an increase in the automation of traditional activities in order to streamline workloads.

"In their expanded roles, treasurers serve as valuable resources to their organizations providing insight from a point of view that was previously overlooked or underutilized," said Kaitz. "As organizations continue to realize the value of the treasurer to their strategic framework, we expect the profession to continue to grow and expand its horizons."

The AFP 2006 Strategic Role Survey was underwritten by Citigroup Corporate and Investment Banking as part of its role as the exclusive partner for AFP Executive Programs. Results were issued based on the responses of more than 500 senior treasury and finance professionals with the typical respondent working for an organization with annual revenues of $2 billion. Full survey results are available at www.AFPonline.org/research.

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The Association for Financial Professionals, headquartered in Bethesda, Maryland, supports more than 15,000 individual members from a wide range of industries throughout all stages of their careers in various aspects of treasury and financial management. AFP is the daily resource for financial professionals for continuing education, career development, certifications, research, representation to legislators and regulators, and the development of industry standards. Sponsored by the Association for Financial Professionals, the CTP designation is the globally recognized industry standard for treasury and a requirement for a changing profession. More than 16,000 professionals have earned AFP's certification since 1986. For more information about AFP, visit http://www.AFPonline.org