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The role and responsibility of the financial manager
Treasury function
3.1 The role of the treasury function
Most large companies have a separate treasury function to undertake some of these
roles.
A separate treasury function is more likely to develop the appropriate skills needed to
survive in today’s complex financial environment, and it should also be easier to
achieve economies of scale (for instance in achieving lower borrowing rates, or
netting-off balances).
3.2 Treasury and financial control
In a large entity the finance function may be split between treasury and financial
control, with both functions reporting to the chief financial officer.
The financial control function will be concerned primarily with the allocation and
effective use of resources, and will have responsibility for investment decisions.
The treasury function is usually responsible for obtaining finance and managing
relations with the financial stakeholders of the entity who will include shareholders
and lenders.
Close liaison is often required between financial control and treasury.
Illustrations and further practice
Now try TYU 2 from Chapter 1
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