Chief financial officer

 ( Corporate Titles ) 

A chief financial officer ( CFO) is an Corporate title of a company or organization who is assigned the primary responsibility for making decisions for the company for projects and its ; i.a.: , management of , record-keeping, and financial reporting, and, increasingly, the Data analysis. The CFO thus has ultimate authority over the finance unit and is the chief financial spokesperson for the organization.

The CFO typically reports to the chief executive officer (CEO) and the board of directors and may additionally have a seat on the board. The CFO directly assists the chief operating officer (COO) on all business matters relating to budget analyst, cost–benefit analysis, forecasting needs, and securing of capital markets. Some CFOs have the title CFOO for chief financial and operating officer. In most countries, finance directors ( FD) typically report into the CFO, and FD is the level before reaching CFO.

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Legal requirement The appointment of a CFO or FD may be mandated by law. For example, in India, per the provisions of Section 203 of Companies Act 2013 every public company having a paid up share capital of Rs. 10 Crores, requires a full time CFO. In the government sector this may be specified also: The US Chief Financial Officers Act, enacted in 1990, created a CFO in each of 23 federal agencies. (See also Office of Management and Budget and Office of Federal Financial Management.)

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Role The CFO serves as the financial authority in the organization. A major responsibility is then financial reporting (although a majority still spend much of their time in traditional accounting tasks such as transaction reporting). Relatedly, the CFO is expected to be a key player in stockholder education and communication. The CFO also holds ultimate responsibility for the day-to-day aspects of financial management, ensuring an operating environment that values cash flow, , and risk mitigation. The CFO thus has oversight of risk-, investment- and treasury management: the Chief Risk Officer, Chief Investment Officer and Treasurer will report to the CFO (or in smaller firms, the CFO assumes these roles). CFOs, in some organizations, will appoint a Chief Procurement Officer.Aberdeen Group, target="_blank" rel="nofollow"> The CFO’s View of Procurement: Getting More to the Bottom Line, published September 2005, archived on 23 January 2024, accessed on 2 August 2025Bartolini, A. and Dwyer, C., The CFO’s View of Procurement: Work in Progress, Aberdeen Group, published in November 2009

CFOs are increasingly being relied upon as the owners of business information, reporting and financial data within organizations. In this role, then — as outlined above — assisting in decision support so as to enable the company to operate more effectively and efficiently; and relatedly, ensuring data integrity, and model risk and accountability. The rise of digital technologies and focus on data analytics to decision support, places more pressure on CFOs to meet the expectations of their C-Suite colleagues. Here, many organizations have created a Finance function based on four pillars:

1. the accounting organization as a shared services
2. an FP&A organization responsible for driving financial planning processes as well as increased insight into financial and non financial KPIs to boost business performance
3. a finance business partnering organization based on leadership of divisions, regions and performance improvement
4. expertise centers specializing in Tax, Treasury, internal audit, Investor Relations, etc.

The CFO was traditionally viewed as a financial "gatekeeper". Over time, the position has become one of an advisor and strategic partner to the CEO. According to one source, "The CFO of tomorrow should be a big-picture thinker, rather than detail-oriented, outspoken rather than reserved, prefer to delegate rather than be hands-on, emphasize what gets done rather than how things are done, and make collaborative rather than unilateral decisions". The duties of a modern CFO, therefore, now straddle the traditional areas of financial stewardship, as well as the more progressive areas of strategic- and business leadership, with increasingly direct responsibility and oversight of operations. This significant role-based transformation is best-evidenced by the "CEO-in-Waiting" status that many CFOs now hold.

Here, increasingly expect their CFOs to be active participants in shaping the strategy of their organizations, including challenging the current strategy. CFOs thus play a critical role in shaping their company's strategies, functioning as a leader and team builder who sets the financial agenda for the organization, supports the CEO directly and provides timely advice to the board of directors. This is especially so in uncertain macroeconomic environments, where managing financial volatilities is a centerpiece for many companies' strategies. Indeed, the 1990s saw the rise of the strategic CFO, and many companies have created a chief strategy officer (CSO) position. See also Strategic financial management. The CFO is then as much a part of governance and oversight as the CEO, playing a fundamental role in the development and critique of strategic choices. Due to their importance, CFO departures—whether due to retirement, dismissal, or new opportunities—can significantly affect a company’s direction and stability, especially given the CFO’s growing role as a strategic partner to the CEO.

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Qualifications CFOs and FDs often hold a professional accounting qualification - the CPA, CA, CMA, or CIMA - along with its requisite bachelors and/or masters in accounting. The certification is specified given that responsibilities extend to tax and financial reporting.CollegeGrad LLC, Top Executives Similarly, financial managers are often qualified accountants.

In large companies, CFOs and FDs may hold additional postgraduate qualifications,Hugh Arnold and Ross Woledge (ND). Want to be CFO one day? You need to take control of your career such as a Master of Business Administration, Careers in Finance. §1.4 in

or Master of Science in Finance; Determine If a Master's in Finance Is the Right Move, usnews.com, Feb. 9, 2015. the Chartered Financial Analyst is also common. These complement the accounting perspective with more general strategic, leadership and financial market considerations, and give exposure to broader financial and operational issues.

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See also

• Auditor general
• Comptroller
• Treasurer
• Virtual CFO
• Financial manager

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External links

Categories: Corporate Titles, Management Occupations, Corporate Executives, Finance Occupations, Financial Management

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