Rapid changes to treasury strategy introduced in response to Covid-19 appear likely to endure as companies adjust to the pandemic having longer-term impact, the latest Economist Intelligence Unit survey suggests
Treasurers expect the fallout from the Covid-19 pandemic to persist over the next five years and shape the “new normal” for corporate finance globally, suggests the latest report from the Economist Intelligence Unit (EIU).
Titled ‘The Resilient Treasury: Optimising strategy in the face of Covid-19’, the report, supported by Deutsche Bank, is the latest in EIU’s studies of strategic change in the treasury function. The 2020 edition is based on a survey of 300 senior corporate treasury executives conducted in April and May this year, after lockdown measures has been imposed on many regions of the world.
As the EIU report notes, treasurers had only just started to implement strategies for 2020 when the economic picture for the year changed irrevocably, due to the speed with which the pandemic spread across the globe. Treasury plans were quickly and dramatically altered as the treasury function was obliged to shift to a remote working environment. The focus shifted away from long-term cash forecasts in favour of shorter-term, more regularly interrogated forecasts to get an accurate picture of cash and liquidity.