What Is a Corporate Treasury?
A corporate treasury is a department within an organization that oversees the management of its financial resources. The primary responsibility of the corporate treasury is to ensure that there are sufficient funds available for operations and investments, while also managing risk associated with those activities. This includes monitoring cash flow, investing excess funds in short-term securities, and ensuring compliance with applicable laws and regulations. Corporate treasuries may also be responsible for overseeing foreign exchange transactions, hedging against currency fluctuations, issuing debt instruments such as bonds or commercial paper, and providing liquidity through lines of credit or other financing arrangements.
The corporate treasury team typically consists of experienced professionals who have expertise in finance, accounting, economics and law. They work closely with other departments within the company to develop strategies for optimizing returns on investments while minimizing risks associated with them. Additionally they provide guidance on capital structure decisions such as when to issue equity versus debt instruments; how much leverage should be taken on; what types of derivatives should be used; etc., all aimed at maximizing shareholder value over time.