treasuryone-south-africa-treasury-policy-introductionA well-crafted treasury policy is indispensable for safeguarding an organisation’s financial assets and managing risks effectively. At TreasuryONE, we understand the intricacies of formulating a treasury policy that adheres to regulatory standards, and that aligns with strategic business objectives. 

Here’s how to draft a comprehensive treasury policy:

Step 1: Define the Purpose and Scope

treasuryone-south-africa-treasury-policy-purposeThe treasury policy is the blueprint for your organisation’s financial risk management strategy. It should clearly define the purpose of the treasury operations, which may include managing liquidity, currency risks, interest rates, and other financial exposures. The scope of the policy must outline the limits of authority and the breadth of responsibilities of the treasury function.

Step 2: Establish Risk Management Framework

treasuryone-south-africa-treasury-policy-frameworkA robust risk management framework is the core of any treasury policy. This framework should detail the process for identifying, assessing, and mitigating financial risks. Key components include:

  • Risk Identification: Determine which financial risks are relevant to your organisation.
  • Risk Assessment: Evaluate the potential impact and likelihood of these risks.
  • Risk Mitigation: Define strategies for mitigating risks, including hedging and other financial instruments.

Step 3: Assign Roles and Responsibilities

treasuryone-south-africa-treasury-policy-responsibilitiesEffective risk management requires a clear delineation of roles and responsibilities. Use a RACI (Responsible, Accountable, Consulted, and Informed) matrix to assign specific responsibilities related to financial risk management across the organisation. This ensures accountability and enhances collaboration across departments.

Step 4: Implement Governance and Compliance Measures

treasuryone-south-africa-treasury-policy-complianceGovernance and compliance are crucial for ensuring that treasury activities are conducted within legal and ethical boundaries. Your policy should include:

  • Compliance Protocols: Adhere to both internal policies and external regulatory requirements.
  • Audit Procedures: Regular audits should be conducted to ensure compliance and to assess the effectiveness of the treasury operations.
  • Policy Updates: Define a process for regularly reviewing and updating the treasury policy to adapt to new challenges and changes in the regulatory landscape.

Step 5: Drafting the Policy Document

treasuryone-south-africa-treasury-policy-documentWith the framework and roles defined, the actual drafting of the treasury policy can begin. Organise the document into clear sections that cover the content, process guidelines, and governance aspects:

  • Content: Detail the financial risks and the strategies for managing these risks.
  • Process Guidelines: Describe the processes for risk management, including how risks should be reported and monitored.
  • Governance: Outline the oversight mechanisms to ensure the policy is followed and remains effective.

Step 6: Review and Implement

treasuryone-south-africa-treasury-policy-review-implementBefore finalising the policy, conduct a thorough review with key stakeholders, including the board of directors and senior management. Ensure that the policy is realistic and aligns with the organisation’s overall strategic goals. Once approved, focus on effective implementation, including training staff and aligning internal processes with the policy’s requirements.

Step 7: Monitor and Update

treasuryone-south-africa-treasury-policy-monitor-updateThe financial world is dynamic, and so should your treasury policy. Establish a routine for monitoring the policy’s effectiveness and adjusting as needed. This includes adapting to new financial risks, regulatory changes, and shifts in the business environment.


treasuryone-south-africa-treasury-policy-conclusionAt TreasuryONE, we specialise in helping organisations across South Africa craft policies that comply with current regulations and provide a strategic framework for managing financial risks.

Whether you’re drafting a new treasury policy or reviewing and updating an existing one, our team of experts can guide you through each step of the process.

Our in-depth knowledge and tailored approach ensure that your treasury policy is robust, comprehensive, and aligned with your organisation’s strategic goals, setting a strong foundation for financial stability and success.