Interview | 3 questions for Craig Haymaker, Risk Management Professional

INTERVIEW

What initially drew you to a career in treasury, and how has your passion for the field evolved over the years?

I was auditing the Treasury function at a regional bank in the upper Midwest, US. Treasury was large – roughly 250 employees – and my group had 15 auditors responsible for assessing its processes and controls. My boss sat me down at a table and handed me a document that outlined the scope of work:

• $150 billion USD investment portfolio
• Asset / Liability forecasting, stress testing
• Liquidity risk management
• Funding and derivatives
• Capital allocation and management
• Bank Support Desk

I was shocked. Their activities reached almost every corner of the bank. For example, the Bank Support Desk calculated the cost of funds and distributed this percentage to originators, lenders, and bankers across the entire institution. For me, Treasury was the Bank’s beating heart, and the information it produced was blood cells carrying oxygen to its organs.

Since then, my interest in Treasury has grown. The financial risk management aspects of Treasury have become my area of expertise. I love helping people navigate the complex, yet powerful impact that derivatives can have on an entity’s strategic objectives.

In your opinion, what are the most critical skills and qualities that a successful treasurer should possess?

Treasury is unique in that it straddles finance and accounting. In a financial institution, Treasurers must be adept at liquidity management but must also be considerate of, for example, how altering investment portfolio allocation strategy affects the asset liability paradigm and accounting classification. A Treasurer’s role touches so many financial risk-related activities spanning from basic to complex. They must be versatile and nimble when moving between tasks. A passion for numbers, having an analytical mindset, being a great listener, and willingness to explore the unthinkable are important qualities for a Treasurer.

“If a company was a symphony, and a company’s enterprise value is a function of its cash flow, then surely the Treasurer is its composer.”

Can you share a memorable success story or achievement in your career that you are particularly proud of?

I recall a Fortune 100 company needing help to build a risk management program. They were not new to derivatives. In fact, the company had a checkered history with a rogue trader and currency derivatives in the nineties. They were understandably worried that history would repeat itself, but my job was to show them that with the right people, process, systems, and controls, they could achieve their goals.

I set out to create a framework, beginning top-down with governance, oversight, policies, and procedures. We then approached a software vendor to refine its trading and risk management (xTRM) system in order to accommodate the company’s needs. We tailored the xTRM platform to allow hedging and hedge accounting such that the company could monitor the performance of its risk management program and produce the requisite outputs for financial reporting. When the system was in place, we trained their employees, drafted hedge documentation, built templates for assessing hedge effectiveness, and modified reports for senior leadership.

It was an honor and privilege to help their company in this way. Apart from the satisfaction of achieving critical milestones, that project involved meaningful personal relationships that will last a lifetime. I’ll always remember it fondly.