The CFO & CEO are one of the most important leaders of an organization. While this may look like completely divergent functions, they need to be in harmony for the company’s success. Most crucial decisions are usually taken collectively with CEO & a CFO, to derive the best from both and work towards common business goals.
Responsibilities: The CEO is responsible for every activity within an organization, while the CFO is responsible mainly for the financial aspects of the business.
Reporting relationships: The CEO of the company is overseen by the board of directors of the company, while the CFO reports to the CEO.
Strategy: The CEO is in charge of the overall strategy & tactics used to achieve that strategy. The CFO is responsible for the financial support of the corporate strategy, such as ensuring that there is sufficient liquidity to support operational needs, monitoring the profitability, bottom line of the business, and mitigate the risk.
Development: The CEO is responsible for training personnel within the organization for management positions. The CFO only does so within the areas of finance and accounting.
Liaisons: The CFO has a significant role of liaising with bankers, lenders, investors, and regulators while the Chief Financial Officer is the public face of the company and does not have any liaison roles.
Analysis: The CFO reviews all financial aspects of the business to see if the various operations are controlling costs, improving the bottom line in an appropriate manner, and also responsible to oversee the allocation of resources.
CEO in coordination with CFO from these findings makes decisions about at the top level to make the firm more efficient and effective.
A CFO at the heart of any successful strategy is likely to have the following qualities,
- In-depth understanding from the commercial standpoint
- Flexible attitude and Expertise to offer relevant financial insight on business decisions
- Ability to layout potential corrective action measures and the route map for success
Most of the successful and experienced CFOs are habituated to assess their growth or contribution not just in terms of the business profitability or financial metrics, but also from contributions made towards key strategic initiatives and significant business projects.
Strategically organizations can bring in an Outsourced CFO with the right expertise and experience to take the company to the next level.
As a business, one needs to need to evaluate the performance towards Strategy in terms of whether your company could formulate a long-term strategy and value-added insights leading to objective business decisions.