The Handbook of Global Corporate Treasury

Chapter Twenty Four

Treasury Policy

IN THIS CHAPTER, WE RUN through the key elements of a Treasury policy. The template in Appendix A is available for download. Please refer to the “About the Website” page at the end of the book for more information.

FRAMEWORK

The Treasury policy typically is divided into the body, which contains the overall thought process and approach to Treasury management, and the annexes, which contain the specific execution aspects.

In principle, the board can approve the body of the policy and annexes, providing the Treasury management team with the flexibility to conduct Treasury activities on a regular basis with oversight by the chief financial officer.

The annexes may be reviewed every quarter to ensure synchronisation with market and business developments, and the entire policy and performance under the policy itself may be reviewed annually.

The body of the policy itself can largely be divided into these sections:

• Foundation. Contains the rationale, background and philosophy, scope, operations and control, objectives, policy approval and review, non-compliance and exception resolution, conformance with accounting policy, and code of conduct
• Roles and responsibilities. Contains the organisation structure, role or function-wise responsibilities, committees, and groups
• Transactions Management.
• Balance Sheet and Liquidity Management.
• Risk Management.
• Annexes. Risks to be managed, tenors, amounts and time horizon for risk management and investment, authorised ...