What follows is the second of 8 lessons on “Managing the Modern Treasury”.

For those interested in the treasury function these lessons should be considered introductory in that they cannot replicate in detail all of the knowledge needed to manage today’s complex multinational company that is continually buffeted by ever changing business conditions, many of which are outside of its direct control.

Just like any series each lesson builds on the one before it, culminating in the last lesson which includes action steps which will improve a company’s performance by giving it a multi-dimensional view of performance that goes beyond earnings.

Let’s continue our look at the treasury function by learning about the policies that form the backbone of any modern treasury.

In addition, we learn how these policies should be integrated into the company’s goals (e.g. return to investors, market positions, etc.) within the context of market forces (e.g. competitors, capital market conditions, regulatory forces, etc.).

Even for companies without a formal treasury function it is important that policies similar to the ones we are about to discuss be formally adopted within the company so there are responsible parties (e.g. CFO) for issues associated with liquidity and risk, the business of treasury.