The importance that survey respondents have assigned to various treasury functions has changed significantly in this year’s survey. Interest rate and foreign exchange risk management are now the second and third most important functions respectively, eclipsing operational risk management which is now fourth. Cash and liquidity management remains the most dominant function, as in all previous surveys. A number of aspects of liquidity and cash management have strengthened. There has been an increase in the proportion of companies with a liquidity policy, and the vast majority monitor actual versus forecasted cash flows. As would be expected with the increased importance of foreign exchange and interest rate risk management, hedging of these risks has also increased. Swaps retain their dominance as the instrument of choice in hedging interest rate exposures, as in previous years. In hedging foreign exchange exposure, a decline in the use of forwards has been offset by an increase in the use of cross-currency swaps. This survey has uncovered a theme of increased diligence in monitoring credit risk and liquidity levels. The majority of respondents now monitor credit risk on a real-time basis. Almost all respondents now have a minimum liquidity policy. There have also been significant changes in the composition of and policies towards debt. The majority of respondents now have a policy to diversify borrowing sources, and there has been a significant increase in the proportion of funding sourced offshore. There has been a substantial level of deleveraging. We are pleased to note a significant increase in the level of board involvement in treasury policy and risk management. Board understanding of financial exposures is generally strong, and most organisations report interest rate and foreign exchange risk management to the board. There has also been an increase in both the proportion of companies with a treasury policy, and that measure treasury performance. Despite these positive findings, several negative trends have continued through this survey. Reporting of limit breaches and non-compliance with policy to the board appears to be relatively low. There has been no improvement in such reporting over previous years. There has also been a continued level of dissatisfaction with information received from business units. As in the previous survey, the main complaint concerns the inaccuracy of information provided. Unlike the 2006 survey which saw increases in nearly all responsibilities undertaken by treasuries, the 2011 survey presented data with no discernible trend. While small increases were seen in some functions, present tax planning (-23.6%), non-treasury risk management (-11.4%) and equity raising (-11.3%) showed significant decreases. These irregularities may be attributed to the global financial crisis (GFC) and subsequent recovery causing treasuries to restructure and become more streamlined. With respect to staffing numbers within treasury, there was a substantial decrease in the proportion of one person treasuries relative to 2006 levels (-29%). Conversely, steady rises were present in staffing levels above one person operations, particularly in the 4-8 person bracket (17.4%). Whereas there was an increase in the number of treasurers who found it ‘easy’ to recruit staff (2011: 12.5%, 2006: 7%), there was also an increase in the number of treasurers who had found it ‘difficult’ to recruit (2011: 39.6%, 2006: 22%
