CEOs and CFOs are two different management positions in the business world. The CEO is the highest level of leadership and oversees the entire business, while the CFO manages the business financial aspect.
In this article, we will discuss the differences between a CFO and a CEO, their duties and characteristics.
What’s the difference between a CFO and CEO?
The CEO means Chief Executive Officer and they are the leader of the C-Suite team and generally, the entire organization. They are generally responsible for the entire company strategy and organization.
The CFO means Chief Financial Officer, and they act as the head of the finance department of an organization. They are responsible for overseeing the financial operations, accounting, budgeting and financial analysis.
Who is a CEO?
A chief executive officer (CEO) holds the highest-ranking executive position in a company. Their primary responsibilities include making crucial corporate decisions and also overseeing the entire operations and resources of the company. They also act as the point of communication between the board of directors and the corporate employees of the company.
They are responsible for maximizing the business value of the organization by setting the vision, goals and future direction of the company. Their job roles vary according to various factors such as the size of the company, location of the company and the niche industry. They are directly responsible for the success and failures of the company as they are the principal decision-makers.
Who is a CFO?
A Chief Financial Officer (CFO) is the senior executive of a company that has the primary responsibility of managing the company’s finances. They are responsible for financial planning, risk management, record keeping and financial reporting. In some business niches, the CFO conducts data and financial analysis.
They are the top-level financial controller responsible for handling issues relating to cash flow and financial planning. As the third-highest position in a company, they play a very important role in the planning and strategic innovation process of the company.
They analyze the company’s financial data, prepare annual and quarterly reports, prepare budgets and monitor costs. CFOs of publicly listed companies present the financial statements of their companies to boards of directors, shareholders and investors, and regulatory agencies like the Securities and Exchange Commission, the Federal Reserve Board and the Federal Deposit Insurance Corporation.
Differences between the CEO and CFO roles
The roles of a CEO and CFO have some similarities and some differences. Some of these differences are listed below:
- Key Responsibilities
The main duty of the chief executive officer is to focus on the main goals and future of the company. They do this by collaborating with other members of the management team and the company’s board of directors. They take decisive steps towards making sure that all the goals and visions of the company are achieved within their proposed time frame.
On the other hand, the CFO is the top financial manager of the organization. They are mainly responsible for the financial aspect of the company, reporting back to the CEO on the company’s state of finances. They perform an oversight function just like the CEO, but in their case, they monitor financial-related departments. Some of these functions include budgeting, accounting, compliance, financial analysis and auditing.
The CEO and CFO are responsible for the planning and general strategy of the company. The chief executive officer takes the responsibility for the general strategy of the organization and also the steps to achieve the strategies. The CFO on the other hand assumes responsibility for the general strategy of the financial arm of the company. This simply means they provide the required funds to finance the general needs and expenses of the organization. They allocate the necessary funds to run the general operations of the company.
- Liaisons and Collaborations
The CFO and the CEO play an important role in connecting with other business owners and investors in their niche. The CEO is the public face of the company. They attend business dinners and make speeches. In the course of these events, they meet with community leaders, politicians, the press and other key industry players.
The CFO must handle roles that deal with both qualitative and quantitative analysis. These analyses are to review the finances of various departments of the company and the costs of operation. Together with the auditing or finance team, they carry out analysis on the company’s finances putting the profit and expenses into consideration.
- Company Development
As senior executives of a company, the CEO and the CFO are responsible for the development of the company and its workforce. The CEO approves employees for training and further promotion based on the recommendation of their heads of departments.
The CFO on the other hand trains employees within the company’s financial and accounting sectors.