Difference Between CFO vs CEO
Both the position in an organization play a very important role in organization growth. Any titles are given to a person in an organization to show what duties and responsibilities they have in the organization. This both CFO vs CEO term exists because of corporate governance. Incorporate the world many workplace titles which differ organization to organization. To look after the interest of shareholders many organizations follow or adopt two-tier corporate hierarchies, the first tier is the board of directors and the second tier is organization upper management (COO, CEO, and CFO). Some large companies use titles such as CEO, CFO, CTO and so on whereas smaller organizations may use president, vice-president, director and so on. These top executives are responsible for making decisions that lead to achieving organization financial as well as non-financial goals. All top executive positions required leadership skills along with the ability to develop and implement a strategic vision to support the organizational goals.
The most common and top positions across all industries are CFO vs CEO. These two positions and people associated with this position are the most powerful and influential people in the organization. Let discuss these two CFO vs CEO positions in detail.
Chief Executive officer (CEO)
CEO is the highest or topmost position in an entire organization. The CEO is a leader of the organization and plays an important role between a board of directors of the organization and various levels of the organization.The CEO is responsible for the success and failure of the organization. CEO of the organization is appointed by the board of directors and report to them. One of the major duties of the CEO is to implement the corporate policy which is directed by the organization board. The CEO provides vision and sets the organization’s culture. CEO’s exact duty can be vary based on the number of factors, including the size of the organization and whether it’s a public or private organization.
Chief Financial officer (CFO)
CFO is the highest ranking in financial position. So as the name suggests the main role of CFO is to manage the finance of the company. CFO is an important part of organizational leadership. CFO helps leadership in taking financial decision and execution of those decisions. CFO’s Job is to make an organization financially strong and as profitable as possible. CFO reports directly to the CEO and has substantial inputs into organization investment, capital structure, and money management. CFO’s main responsibility is to maintain and improve the organization’s financial health. CFO is an economist of the organization, responding to both macro and micro parameters. CFO spends the most time looking forward that how will next quarter or year looks like. The role of CFO is to raise funds, understand capital markets, profit planning, Distribution of funds and profit, etc.
Head to Head Comparison between CFO vs CEO (Infographics)
Below is the top 7 difference between CFO vs CEO
Key Differences between CFO vs CEO
Both CFO Vs CEO is a topmost and important position in the organization. Let us discuss some of the major differences between CFO Vs CEO.
- CEO responsible for all activities within the organization where as CFO responsible only for financial activities or side of an organization.
- CEO reports directly to the board of an organization where as CFO reports directly to CEO of an organization.
- CEO drive the organization towards its goal by implementing the corporate policy which is directed by company board whereas CFO job or role is to maintain and improve a company’s financial health
- CEO usually has more equity in the organization where as CFO not always has equity.
- CEO defined strategy and CFO figure out how to fund it.
- CFO responsible to review all aspects of the business and reports all his findings to CEO who make decisions on the basis of that report.
CFO vs CEO Comparison Table
Let’s look at the top 7 Comparison between CFO vs CEO
|The Basis Comparison between CFO vs CEO||CFO||CEO|
|Responsibilities||CFO purely responsible for the financial side of the business.||CEO is responsible for all activities within the organization.|
|Reporting||CFO reports to CEO.||CEO reports to the board of directors.|
|Development||CFO role is to develop personnel within the finance and accounting areas.||CEO role is to find and develop personnel within the company for the management position.|
|Strategy||CFO responsible for the financial strategy of a company and also to support CEO strategy or vision ensuring sufficient cash with the organization.||CEO is responsible for the overall strategy of the organization and implementation of corporate policy as directed by the board of an organization.|
|Connection||CFO connects with investors, banker, regulator, and lenders.||CEO is the public face of the organization, delivering speeches and meeting with press and community leaders whenever needed.|
|Analysis||CFO does the review of all aspects of the business so see that all operation cost are in an appropriate Manner and prepare for that.||CEO did not do any analysis of the organization. CEO reviews the report which is submitted by CFO and takes a decision as per a report.|
|Duties||Duties of CFO mostly set by CEO and it’s mostly overseeing the financial activities of the entire company.||In most cases, the duties of CEO are set by the board of directors and can be very involved.|
Conclusion – CFO vs CEO
- So from above, it is clear that CFO vs CEO are not equals. CEO Drive an organization towards its goal by keeping in mind to its corporate mission and values and CFO provide funding and planning to achieve this goal.
- While a CFO has a role in taking the financial decision but the CEO is ultimately the one who move the financial needle in business. The CFO is nothing but a treasurer or controller of an organization.
- The good corporate governance usually recommends a separation of duties between both CFO vs CEO.
- Its CFO responsibility to maintain organization financial health and work closely with CEO to achieve this, CFO is an economist of the organization.
- CFO act as a right hand to the CEO, maintain a deep relationship with key external stakeholders.
- Why do companies fail because they run out of cash in that case the CFO role comes in to picture and it’s very important for any organization.
This has a been a guide to the top difference between CFO vs CEO Here we also discuss the CFO vs CEO key differences with infographics and comparison table. You may also have a look at the following articles to learn more.
- Top Differences Between Finance and Economics
- Difference Between Stock and Options
- Top Differences Between Investment and Savings
- Accounting vs Financial Management
All in One Financial Analyst Bundle (250+ Courses, 40+ Projects)
4.8 (934 ratings)
250+ Online Courses
Investment Banking Course (with 25+ Projects)
Financial Modeling Course (with 15+ Projects)
Equity Research Training Course (with 6+ Projects)
Project Finance Course
Business Valuation Course (with 10+ Projects)