The CFO serves as the financial authority in the organization. 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. 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 many CFOs still spend much of their time in traditional
accounting tasks such as transaction reporting). 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 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 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. 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. 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. 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. 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. 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. ==Qualifications==