Treasury Strategy & Transformation
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Head2Head: Succeeding in International Treasury

by Bruce Meuli and Jonathon Traer-Clark, Global Business Solutions executives, Global Transaction Services, Bank of America Merrill Lynch

In the second instalment of the TMI Head2Head series, we rejoin Bruce Meuli & Jonathon Traer-Clark, Bank of America Merrill Lynch, who share their insights on how treasury makes the leap from domestic to international – or indeed international to global. Not only do treasurers need the technical skills to manage cash, financing, investment and risk requirements in each country into which the corporation expands, but they also need to be aware of local practices and regulations, and build these into their treasury strategy.

Jonathon Traer-ClarkJTC The issue of ‘going global’ is at the heart of treasury today as corporations of all sizes increasingly sell to, and buy from an expanding range of customers and suppliers. This is resulting in companies becoming more international in their strategy and operations, with significant implications for treasury. While you might be aware that your company is open to making acquisitions, it could still come as a surprise to wake up next month or next quarter as the owner of overseas assets, and be tasked with managing and integrating them.

Bruce MeuliBM I think we need to deal with some definitions first. The terms ‘international’ and ‘global’ aren’t interchangeable. There are few truly global companies or institutions: more often, firms are international, with a focus on certain regions. Job titles can give you an insight into how global a firm’s operations are. Are roles divided by geography, such as EMEA, Eurasia etc., or by function? Do they have global centres of excellence? For instance, it is common for US companies to split their business across domestic North America and international activities: that is, the rest of the world.

Jonathon Traer-ClarkJTC Another assumption people make is that this topic is only about US companies going overseas. Sure, American firms face a degree of complexity when they leave their home turf, but this issue isn’t limited to them. You need to remember that while US companies deal with 50 states and billions in revenue, this is in one currency and a broadly consistent regulatory regime, with perhaps some additional complications for those active in Latin America, Canada and Mexico. Talk to your typical EMEA or Asia treasurer and they may oversee 50 or more countries and as many languages and currencies, plus complex tax and regulatory frameworks. Every day, these treasurers deal with national idiosyncrasies such as difficulties in unlocking cash from regulated economies like China, India or South Africa, and the variety of rules for local director registrations.