When it comes to running a company, everyone knows that the CEO is the top dog of the business. But what about the CFO? Is their role just as important?
Well, I’ve decided to explore the differences between them and discuss how they both work together to ensure the success of a company. I will also dispel some common myths about CEO vs CFO that people often believe.
So, without further ado, let us get started!
- What Do CEO And CFO Stand For?
- What Are The Main Responsibilities Of a CEO vs. a CFO?
- The Basic Corporate Structure
- What Is a COO And a CIO?
- How To Become A CEO or CFO
- Common Myths About CEOs And CFOs
- How Can They Improve Their Working Relationship For The Benefit of The Company?
- So, You’re Good With Numbers?
- CEO vs CFO – Final Thoughts
What Do CEO And CFO Stand For?
Acronyms can be quite confusing, but CEO stands for Chief Executive Officer, whereas CFO stands for Chief Financial Officer.
What is the CEO’s role in a company compared to the CFO’s role?
The CEO is responsible for setting the overall strategy and direction of the company, while the CFO is responsible for ensuring that the financial operations of the company are running smoothly. So, while the CEO is focused on long-term growth, the CFO is focused on short-term financial stability.
What Are The Main Responsibilities Of a CEO vs. a CFO?
People tend to group the C-Level Executives together a lot of the time. So, here are a few examples of what they do and the differences between them.
The chief executive is responsible for:
- Overall strategy and direction of the company.
- Setting goals and objectives.
- Formulating policies.
- Hiring, firing, and managing staff.
- Creating and maintaining relationships with shareholders, partners, and clients.
The CFO is responsible for:
- The financial operations of the company.
- Creating financial reports.
- Managing the budget.
- Negotiating loans and investment deals.
- Overseeing the accounting department.
How do CEOs and CFOs work together to run a company successfully?
A successful company needs both of these positions filled by people who are working together effectively. While the CEO provides the vision and strategy for the company, and the CFO makes sure that the financial operations align with that vision. Together, they can make sure that the company is making progress towards its goals and achieving financial stability.
Who does the CEO and CFO report to?
The CEO normally reports to a board of directors, while the CFO reports to the CEO. So, whilst the CFO is the highest position in the finance department, the chief executive is the highest position in the company.
The Basic Corporate Structure
- Board of Directors: Appoint the chief executive and also have authority over hiring/firing them.
- CEO: Appoints the CFO and has the power of veto over major financial decisions.
- CFO: Reports to the CEO and manages the finance department.
- Finance Department: Comprised of accountants who report to the CFO.
- Accountants: Report to the CFO, responsible for financial record-keeping.
What Is a COO And a CIO?
The COO is the Chief Operating Officer and is responsible for the day-to-day operations of the company, while the CIO is the Chief Information Officer and is responsible for the company’s information technology. There are a lot of acronyms in the corporate world, but usually, if it starts with a C, then they are the chief of something!
These roles report directly to the CEO, and they work together with the CFO to ensure that the company is running smoothly and efficiently. But additionally, they are heads of their own departments and have their own teams to manage.
How To Become A CEO or CFO
To become a CEO, you typically need experience in management and leadership roles. Many start as managers in lower-level positions and work their way up the corporate ladder. To become a CFO, you usually need a degree in accounting or finance, and experience working in these fields. Additionally, if you are the founder of the company, you may be more likely to become the CEO.
Common Myths About CEOs And CFOs
Myth 1: The CEO is the most important person in a company
Busted: While they are certainly important, they cannot do everything on their own. They need the CFO to keep track of all the financial aspects of the company and make sure that everything is running smoothly. Really it goes without saying that everyone is replaceable, including the CEO.
In fact, many businesses, to salvage their public image in a time of crisis, will get rid of their CEO even if it is not directly their fault.
Myth 2: The CFO is just a number cruncher
Busted: They are much more than just a number cruncher. They are responsible for negotiating loans, managing the budget, and overseeing the accounting department. Overall, businesses need to be profitable to survive!
Myth 3: CEOs and CFOs are always fighting with each other
Busted: As much as movies would want you to believe, this is not always the case. While there may be some disagreement between the two positions, they are generally able to work together effectively for the benefit of the company.
How Can They Improve Their Working Relationship For The Benefit of The Company?
There are a few things that they can do:
They need to stay in communication with each other so that they are always on the same page. This can be done through regular meetings, phone calls, or even just emailing each other updates.
While there may be some disagreement between the two positions, it is important for the two bosses to cooperate with each other. This means listening to each other’s ideas and suggestions and working together towards a common goal.
It is important to remember that they are both working towards the same goal: the success of the company. This means that they should respect each other’s opinions and ideas, even if they do not always agree.
So, You’re Good With Numbers?
We’re going to focus on the financial positions in a company by looking at our guides to Financial Officer Job Description, the Director Of Finance Job Description, as well as the Senior Financial Analyst Job Description, and the Financial Controller Job Description.
For some insightful ideas, check out the Careers That Make You Rich, the Best 6 Figure Jobs, along with Jobs That Can Make You A Millionaire, the Top Good High Income Skills To Learn, or perhaps you’d prefer the Top Low Stress Jobs That Pay Really Well in 2023.
But, that’s not all; we also have our Best Paying Jobs In Finance, and if you’re great in accounting, Companies That Hire For Remote Accounting Jobs, along with the career guides such as our Accounting Assistant Job Description, Accounting Specialist Job Description, and finally, our Tax Auditor Job Description.
CEO vs CFO – Final Thoughts
The roles of CEOs and CFOs are important in a company, and they must have a good working relationship.
This means communicating regularly, cooperating, and being respectful of each other’s opinions. If they can do this, they will be able to work together towards the common goal of the company’s success. In the battle between CEO vs CFO, there is no winner or loser because both positions are essential for a company to run smoothly.
So, now you know the difference between a CEO and a CFO!