{{short description|Person in a company or organization responsible for finances}} {{redirect|CFO}} {{Use dmy dates|date=September 2015}} A '''chief financial officer''' ('''CFO''') is an officer of a company or organization who is assigned the primary responsibility for making decisions for the company for projects and its finances; i.a.: financial planning, management of financial risks, record-keeping, and financial reporting, and, increasingly, the analysis of data. 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 management, cost–benefit analysis, forecasting needs, and securing of new funding. Some CFOs have the title '''CFOO''' for '''chief financial and operating officer'''.<ref>{{Cite web|url=https://wikimediafoundation.org/wiki/Job_openings/CFOO|title=Job openings/CFOO - Wikimedia Foundation|website=wikimediafoundation.org|language=en|access-date=2018-06-11|archive-date=12 June 2018|archive-url=https://web.archive.org/web/20180612142705/https://wikimediafoundation.org/wiki/Job_openings/CFOO|url-status=dead}}</ref> In most countries, '''finance directors''' ('''FD''') typically report into the CFO, and FD is the level before reaching CFO.
==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 publicly listed firm 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.)
==Role== The CFO serves as the financial authority in the organization.<ref>{{Cite web|date=2021-05-06|title=What Does a Finance Director Do?|url=https://www.fdcapital.co.uk/what-does-a-finance-director-do/|access-date=2021-06-17|website=FD Capital Recruitment|language=en-GB}}</ref> Significantly, the CFO holds ultimate responsibility for the day-to-day aspects of financial management, ensuring an operating environment that values cash flow, profit margins, and risk mitigation; tax management (and optimization) will be a parallel focus. 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.<ref>Aberdeen Group, [https://web.archive.org/web/20240123061725/https://www.sipm.com/Procurement-Academy/Articles/Finance/cfo_view_procurement.pdf The CFO’s View of Procurement: Getting More to the Bottom Line], published September 2005, archived on 23 January 2024, accessed on 2 August 2025</ref><ref>Bartolini, A. and Dwyer, C., [https://www.globenewswire.com/en/news-release/2009/12/09/994013/0/en/The-CFO-S-View-of-Procurement.html The CFO’s View of Procurement: Work in Progress], ''Aberdeen Group'', published in November 2009</ref><ref name="Ardent">{{cite web|url=http://ardentpartners.com/research/index.php?main_page=product_info&cPath=4_12&products_id=1|title=The CFO and the CPO: One World, Two Worldviews Chief Financial Officer (CFO) and Chief Procurement Officer (CPO)|website=Ardentpartners.com|access-date=21 November 2017|archive-date=24 September 2011|archive-url=https://web.archive.org/web/20110924045005/http://ardentpartners.com/research/index.php?main_page=product_info&cPath=4_12&products_id=1|url-status=dead}}</ref>
The CFO also drives the company's long-term financial ''strategy''. Here, they will be critically involved in determining the viability and (see below) direction of major capital investments. This extends - as relevant - to e.g. mergers and acquisitions, and to corporate actions more generally. Corresponding to these, the CFO is responsible for managing the company's capital structure; this entails identifying and maintaining the appropriate mix of equity and debt financing — if necessary raising capital via an equity- or debt issuance. This latter will include negotiating with investors, banks, and other financial institutions. See Strategic financial management and Capital budgeting.
A major responsibility is financial reporting - and its related compliance (although <!-- - as of 2016 - --> many CFOs still spend much of their time in traditional accounting tasks such as transaction reporting).<ref>{{cite web|title=Future of the Finance Function Survey 2016|url=http://www.fsn.co.uk/channel_enterprise_financials/fsn_future_of_the_finance_function_survey_2016_reveals_cfos_role_is_overhyped|work=FSN Research|access-date=25 May 2016|archive-url=https://web.archive.org/web/20160529110046/http://www.fsn.co.uk/channel_enterprise_financials/fsn_future_of_the_finance_function_survey_2016_reveals_cfos_role_is_overhyped|archive-date=29 May 2016|url-status=dead}}</ref> Included here — for listed companies — will be the various mandated security filings and shareholder reports. Typically, then, the CFO is expected to be a key player in stockholder education <ref>{{cite web|url=http://www.slideshare.net/MaureenOConnell/how-cfos-can-turn-stakeholders-into-allies-by-maureen-oconnell-40809275?related=1|title=How CFO's Can Turn Stakeholders Into Allies - By Maureen O'Connell|last=Maureen O'Connell, Scholastic Inc.|date=28 October 2014|website=Slideshare.net|access-date=21 November 2017}}</ref> and communication. The Comptroller, Company Secretary, and Investor Relations Officer will also report to the CFO.
CFOs are thus relied upon as the owners of financial data within organizations; increasingly, this includes business data more generally. In this role, then — as outlined above — the CFO's responsibilities extend to decision support, enabling the company to operate more effectively and efficiently; and relatedly, ensuring data integrity, and model transparency and accountability. The CFO and Chief Information Officer must therefore <ref>Meredith Bell (2023). [https://www.forbes.com/councils/forbestechcouncil/2023/10/10/a-strong-cio-and-cfo-relationship-is-key-to-business-success/ Strong CIO And CFO Relationship Is Key To Business Success], forbes.com</ref> collaborate, sometimes sharing KPIs.
This focus on data analytics to support decision-making (along with the rise of digital technologies) places pressure on CFOs to meet the expectations of their C-Suite colleagues.<ref>{{Cite news|url=https://beebole.com/blog/technology-trends-for-cfos/|title=6 Technology Trends for CFOs in 2018: We asked the experts.|date=2018-01-08|work=The Management Blog by BeeBole Timesheet|access-date=2018-05-01|language=en-US}}</ref> Here, many organizations have created a Finance function based on four pillars: # the accounting organization as a shared service # 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 # a finance business partnering organization based on leadership of divisions, regions and performance improvement # expertise centers specializing in Tax, Treasury, Internal Audit, Investor Relations, etc.
The CFO was traditionally viewed as a financial "gatekeeper". Over time - as outlined - the position has become one of an advisor and strategic partner to the CEO.<ref>{{Cite web|url=https://techcrunch.com/2015/04/14/cfo-role-shifts-from-number-cruncher-to-business-leader/|title=CFO Role Shifts From Number Cruncher To Business Leader – TechCrunch|website=techcrunch.com|date=15 April 2015 |language=en-US|access-date=2018-05-01}}</ref><ref>{{Cite news|url=https://www.forbes.com/sites/forbestechcouncil/2018/03/26/with-ai-cfos-are-poised-to-evolve-their-role-within-organizations/#62b12a4e5175|title=With AI, CFOs Are Poised To Evolve Their Role Within Organizations|last=Harris|first=Aaron|work=Forbes|access-date=2018-05-01|language=en}}</ref> 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".<ref>{{Cite news|url=https://www.entrepreneur.com/article/272476|title=Good Chief Financial Officers Focus on Much More Than Finance|last=Zwilling|first=Martin|date=2016-03-18|work=Entrepreneur|access-date=2018-05-01|language=en}}</ref> 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.<ref>{{cite web|url=https://www.forbes.com/sites/jeffthomson/2016/01/14/why-cfos-need-to-be-chief-future-officers/|title=Why CFOs Need To Be Chief Future Officers|first=Jeff|last=Thomson|website=Forbes.com|access-date=21 November 2017}}</ref> The relationship with the COO mirrors that with the CIO as above.
This significant role-based transformation is best-evidenced by the "CEO-in-Waiting" status that many CFOs now hold. Here, CEOs increasingly expect their CFOs to be active participants in shaping the strategy of their organizations, including challenging the current strategy.<ref>{{cite web|title=McKinsey on Finance. No. 27, Spring 2008|url=http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/corporate%20finance/mof/pdf%20issues/mof_issue_27_spring%2008.ashx|work=McKinsey.com|access-date=1 June 2016}}</ref><!-- The uneven pace of recovery worldwide has made it more challenging for many companies. ?dated? --> 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.<ref>{{cite web|title=What Board expects from CFO|url=http://www.topfinanceprofessionals.com/white-papers/what-board-expects-from-cfo|work=TopFinanceProfessionals.com|access-date=7 December 2013|archive-url=https://web.archive.org/web/20131213080755/http://www.topfinanceprofessionals.com/white-papers/what-board-expects-from-cfo|archive-date=13 December 2013|url-status=dead}}</ref> This is especially so in uncertain macroeconomic environments,<ref>{{Cite web|url=https://techcrunch.com/2014/10/22/1071706/|title=When Should Startups Hire A CFO? – TechCrunch|website=techcrunch.com|date=22 October 2014 |language=en-US|access-date=2018-05-01}}</ref> where managing financial volatilities is a centerpiece for many companies' strategies.<ref name="Clariden Global">{{cite web|url=http://www.claridenglobal.com/clariden_leadership_programs.php|title=Clariden Global|website=Claridenglobal.com|access-date=21 November 2017}}</ref> Indeed, the 1990s saw the rise of the strategic CFO, and many companies have created a chief strategy officer (CSO) position.<ref>{{Cite news|date=2016-01-11|title=Who's Better at Strategy: CFOs or CSOs?|work=Harvard Business Review|url=https://hbr.org/2016/01/whos-better-at-strategy-cfos-or-csos|access-date=2021-05-09|issn=0017-8012}}</ref>
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.<ref>{{Cite journal |last1=Zhang |first1=Ziheng |last2=Mount |first2=Matthew P. |last3=Zhang |first3=Stephen X. |date=2025 |title=A database of chief financial officer turnover and dismissal in S&P 1500 firms, 2000–2022 |journal=Strategic Management Journal |language=en |volume=46 |issue=5 |pages=1293–1321 |doi=10.1002/smj.3693 |issn=1097-0266|doi-access=free }}</ref> <!-- Additionally, many CFOs have made the realization that an operating environment that values cash, profit margins, and risk mitigation is one that plays to the primary skills and capabilities of a procurement organization; CFO's have been encouraged to appoint a chief procurement officer (CPO) where this post does not exist, ensure the post-holder is accountable for procurement success, and to become increasingly involved (directly via oversight or indirectly through improved collaboration) with the procurement function according to several research reports which have looked at the CFO's relationship with the procurement function and the CPO.<ref>Aberdeen Group, [https://www.sipm.com/Procurement-Academy/Articles/Finance/cfo_view_procurement.pdf The CFO’s View of Procurement: Getting More to the Bottom Line], published September 2005, accessed 23 January 2024</ref><ref>Aberdeen Group, [https://www.globenewswire.com/en/news-release/2009/12/09/994013/0/en/The-CFO-S-View-of-Procurement.html The CFO’s View of Procurement: Work in Progress], published November 2009</ref><ref name="Ardent">{{cite web|url=http://ardentpartners.com/research/index.php?main_page=product_info&cPath=4_12&products_id=1|title=The CFO and the CPO: One World, Two Worldviews Chief Financial Officer (CFO) and Chief Procurement Officer (CPO)|website=Ardentpartners.com|access-date=21 November 2017|archive-date=24 September 2011|archive-url=https://web.archive.org/web/20110924045005/http://ardentpartners.com/research/index.php?main_page=product_info&cPath=4_12&products_id=1|url-status=dead}}</ref> -->
==Qualifications== {{see also|Financial analyst#Qualification|Outline of finance#Education}} 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.<ref>CollegeGrad LLC, [https://collegegrad.com/careers/top-executives Top Executives]</ref> Similarly, financial managers are often qualified accountants.<ref>[https://fasset.org.za/fasset_careers.html Careers: Financial Manager / Chief Financial Officer], fasset.org.za</ref>
Often in larger companies, CFOs and FDs may hold additional postgraduate qualifications,<ref name="Arnold_Woledge">{{Cite web|title=Want to be CFO one day? You need to take control of your career {{!}} Rotman School {{!}} University of Toronto|url=https://www.rotman.utoronto.ca/programs/professional-development-programs/executive-programs/blog/aspiringcfos/|website=www.rotman.utoronto.ca|access-date=2025-11-27|language=en|last=Rotman}}</ref> such as a Master of Business Administration,<ref name="Dahlquist">[https://openstax.org/books/principles-finance/pages/1-4-careers-in-finance Careers in Finance]. §1.4 in {{cite book |title=Principles of Finance |date=2022 |isbn=9781951693541 |first1=Julie |last1=Dahlquist |first2=Rainford |last2=Knight |first3=Alan S. |last3=Adams |publisher=OpenStax, Rice University |url=https://open.umn.edu/opentextbooks/textbooks/principles-of-finance }}</ref> or Master of Science in Finance;<ref name="usnews">[https://www.usnews.com/education/best-graduate-schools/top-business-schools/articles/2015/02/09/determine-if-a-masters-in-finance-is-the-right-move ''Determine If a Master's in Finance Is the Right Move''], usnews.com, Feb. 9, 2015.</ref> 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.<ref name="Arnold_Woledge" />
==See also== <!-- * Auditor general --> * Comptroller * Treasurer * Virtual CFO * Financial manager
==References== {{Reflist}}
==Further reading== * Steven Bragg (2020). ''The CFO Guidebook (4th ed.)''. AccountingTools. {{ISBN|9781642210484}} *Frank Fabozzi, Pamela Peterson, and Ralph Polimeni (2008). ''The Complete CFO Handbook - From Accounting To Accountability''. Wiley. {{isbn|9780470099261}}
==External links== *{{Commons category-inline|Chief financial officers}}
{{corporate titles}} {{Authority control}}
Category:Chief financial officers Category:Corporate titles Category:Management occupations Category:Corporate executives Category:Finance occupations Category:Financial management