Shell - learning from mistakes

A global center where all treasury activities of a multi-national company can take place is very attractive in theory, but as Shell found out, in Asia, a regional treasury center works out better.
The case for setting up a centralized operation for treasury activities is certainly attractive. Benefits include the pooling of expertise in one location, resulting in better control over information and capital flows, improved risk and liquidity management, and a reduction in funding, foreign exchange and transactional costs. For multinational companies, the benefits and savings can be significant, but there are limits. Asia, with its plethora of financial standards, regulations, clearing systems, time zones and currencies, just to name a few, can be a bewildering region to manage. Often the answer points to a regional treasury centre set in Asia itself.

In the case of Shell, a treasury centre was set up in London in...

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