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People outside the business world often get confused with the roles played by the CEO vs. CFO. The Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) take on different but equally important responsibilities in an organization.
The CEO assumes the main role of overseeing the operations of the entire company, from sales to administration. He holds the highest rank in the company and only reports to the board of directors. On the other hand, the CFO assumes the highest-ranked financial position in the company. The main focus of a CFO is the financial management of the business.
The CEO is the most senior manager of an organization, who oversees the activities of the whole organization. Chief executive officers manage different organizations, such as government entities, non-profit organizations, and private and public corporations.
The CEO usually reports to the board of directors of the company and is responsible for maximizing the entity’s value, including revenues, market share, share price, etc. In the government and non-profit sector, chief executive officers typically seek to achieve results that relate to the mission of the organization.
The CFO is a senior manager with the primary role of overseeing the management of the company’s finances and financial activities, including financial risk management, financial planning, financial reporting, record-keeping, signing checks, and analysis of data. The CFO is comparable to a controller or treasurer.
The chief financial officer usually reports to the CEO, as well as the board of directors. They may also assume a seat on the board. They are the head of the company’s finance personnel and are also the key financial spokesperson. They normally support the Chief Operating Officer (COO) on both tactical and strategic matters concerning cost-benefit analysis, securing of new funding, forecasting needs, and budget management.
The significant differences in the roles played by the CEO vs. CFO are listed below:
The chief executive officer’s main duty is to keep an eye on the big picture, overseeing the operations in all departments and making sure that the long-term goals of the company are realized. The CEO doesn’t involve himself/herself in the detailed tasks of every department but maintains a general oversight with the aid of department managers.
They usually focus on things like articulating the vision of the company to personnel and potential clients, executing decisions made by the board of directors of the company, developing leadership in the company, encouraging productivity, and ensuring a strong position is maintained in the market.
The CEO is chiefly accountable for the overall company performance. The role is usually determined by the board of directors. On the other hand, the CFO is responsible for the financial part of the company only. The CFO is the top financial manager of the organization. The CFO is, in most cases, responsible for a number of departments that are financial-related, such as budgeting, accounting, compliance, and auditing.
The CEO assumes the responsibility for the general strategy of the organization and the procedures used to accomplish that strategy. The CFO is in charge of the financial support of the corporate strategy, meaning they ensure that sufficient cash is available to cover strategic needs and alleviate risk.
The CFO also plays an important liaison role, since they build relationships with lenders, banks, investors, regulators, and other financial institutions. For instance, the CFO attends meetings with private investors to discuss the latter’s interest in the company or with bankers to create lines of credit.
The CEO is the public face of the company, making speeches and meeting with community leaders and the press.
The CEO generally reports to the company’s board of directors, while the CFO reports to the CEO. As the chief financial officer, the CFO puts together the annual budgets of the company, analyzes financial data, and tracks expenses and revenues. The CFO may also sit on the board of directors, just like the CEO.
The CFO handles tasks that need quantitative and qualitative financial analysis. He/she is responsible for reviewing various aspects of the company to ensure that the costs of operations are controlled in a proper manner and that resources are correctly allocated.
The CFO also conducts an analysis of future capital investment of the company and reviews current market trends. He then reports such results to the CEO, who decides how to adjust the operations of the firm to make it more effective and efficient.
It is the responsibility of the CEO to search, find, and prepare employees within the firm for positions of management. The CFO finds and grooms personnel within areas of accounting and finance only.
