Purpose & responsibilities

The purpose and responsibilities of a treasury

Treasuries are used for managing the assets and liabilities of nation states, corporations, organisations and communities. Treasuries handle how assets get deposited, stored and disbursed. Treasuries are responsible for ensuring financial stability and for the efficient allocation of resources.

Purpose of a treasury

Treasuries help with securely handling the assets and liabilities of an ecosystem such as for nation states, corporations or any other form or organisation. How each ecosystem manages and disburses their assets will heavily depend on what their own goals and objectives are. Some ecosystems might prioritise the sustainability and growth of their treasury assets over the long term. Other ecosystems might prioritise impact based outcomes, where they are more heavily focused on directing assets towards initiatives that can help them with achieving those outcomes. Ecosystems can often have a combination of goals and objectives that they want to achieve with their treasury.

Historical treasury responsibilities

• Asset & liabilities management - Treasuries are often responsible for the management of any cash, debt, capital structure and investments of an ecosystem. Cash management involves ensuring there is enough liquidity for an ecosystem to meet its short term obligations as well as forecasting future cash flows and balances. Debt management involves handling any short or long term debts and responsibly managing any debt levels. Capital structure management involves determining what the optimal mix is of debt and equity for the ecosystem at that point in time. Investment management involves managing how any surplus of assets are invested to earn a return or if invested could help with addressing any ecosystem priorities. How effectively assets and liabilities are managed across these areas will impact the overall sustainability and growth of an ecosystem over the long term.

• Risk management - Treasuries that are responsible for other people's assets will need to manage any existing or emerging risks. Risk management can help with determining how accounts and transactions should be secured and handled as well as dealing with external risks such as inflation, foreign exchange risks or any other economic changes. A big part of risk management is planning for these risks ahead of time and preparing accordingly so that treasury assets are well protected.

• Compliance with regulation - Ecosystems accepting any form of income and disbursing assets to fund different initiatives will be responsible for ensuring that those activities comply with any regulations that are applicable to the jurisdictions they operate in. Managing regulatory concerns will include looking at existing and future policies of these nations and then supporting any internal efforts to ensure that the treasury operations comply with these regulations.

• Strategic planning - Those involved with managing treasuries can often play an important role in strategic planning. Financial strategies can help with aligning treasury functions with achieving ecosystem goals and objectives. Treasuries can also be responsible for assessing potential mergers and acquisitions of other ecosystems. Treasuries will need to support these larger strategic transactions.