# Chief financial officer

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. In the majority of 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 chief financial officer was traditionally viewed as a financial "gatekeeper". Over time, 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. 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 today, especially in light of the highly 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.
See also Strategic financial management.
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. Relatedly The CFO is expected to be a key player in stockholder education and communication and is clearly seen 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."
The rise of digital technologies and focus on data analytics to support decision-making, places more 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.
CFOs are increasingly being relied upon as the owners of business information, reporting and financial data within organizations - thereby also assisting in decision support operations to enable the company to operate more effectively and efficiently. The CFO must then serve as the financial authority in the organization, ensuring the integrity of data, and modeling transparency and accountability. CFOs have then become more focused on financial reporting, although (as of 2016) a majority still spend much of their time in traditional accounting tasks such as transaction reporting.
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.

## Qualifications

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. Similarly, financial managers are often qualified accountants.
In large companies, CFOs and FDs may hold additional postgraduate qualifications, such as a Master of Business Administration, or Master of Science in Finance; 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.