In any organization, Roles and responsibilities of each and every stakeholder play a very important role in driving the overall business.
This has been possible because everyone knows what role they are going to play.
What is being required out from them in order to layout a proper business plan for the organization?
As it is rightly said that hierarchy is laid down in an organization in order to ensure smooth organizing of work.
Where the bureaucracy involves information flow from Top-level management to Bottom level management.
BUT do you know that in any organization what role do CEO and CFO play?
One cannot sideline the importance of roles what CEO and CFO has to offer, as they are very crucial to any organization
Both the CEO and CFO are part of the top-level management of any firm.
It does still exists and companies have aligned different skillsets for CEO and CFO.
CEO vs CFO
The difference between CEO and CFO and is that CEO of any company holds the top position in terms of strategic overlaying. CEO is in charge of taking overall decisions for the firm, CFO of any company holds the top position in terms of financial planning. CFO are in charge of taking crucial financial decisions for the firm.
The CEO can be the owner of an organization or is being hired by the board members.
CFO is hired in the organization by the Board of organization with CEO inclusion as well
Therefore, we should keep in mind that both the CEO and CFO have an important set of roles and responsibilities.
They are very crucial in terms of the company’s vision-mission achievement.
There are different sets of responsibilities that set apart the CEO than CFO.
Hence the company follows a different approach while hiring a CEO and a CFO.
In this guide, we are covering all the essential details for you to understand the difference between the CEO and CFO, so as you know about these two roles.
Comparison Table
| Parameter of Comparison | CEO | CFO |
|---|---|---|
| Definition | CEO of any company holds responsibility for all the strategic activities that occur in an organization.This role is administered by the board of directors. | CFO of any company holds the top position in terms of financial planning.CFO role is administered by the CEO of the organization. |
| Role | Leading an organization and overlooking all departments | Leading and overlooking the Financial Department |
| Type of Risk | Looks for overall strategic risk | Looks only at financial risk |
| Liaison | In Liaison with all the stakeholders of the organization | In Liaison with financial stakeholders. |
| Decision | Accountable to take overall organization’s decisions | Accountable to look only at financial decisions |
| Skillsets | Can be from any background (eg Sales, Operations, Technical, etc.) | Necessary to have a financial background |
Who is CEO?
CEO of any company holds the top position in terms of strategic overlaying.They are in charge of taking overall decisions for the firm.
CEO of any organization looks for overall strategic risk.As they are answerable for complete organization’s decisions which may lead to the company’s success or failure.
Following are some roles of a CEO known;
- Leading the organization and administering all departments
- Responsible for mitigating strategic risk
- In Association with all the investors of the organization
- Responsible to take overall organization’s decisions
- Look out for ways to see profitability and the organization’s growth.
The primary objective of the CEO in any business is to look at the strategy, mission, and goals of the entire organization.The CEO might be an internal board member, or can even be chairing the board of the organization.
Therefore, it is equally important to also know, that CEO is quite important for any organization that is looking to ensure their vision, the mission is fulfilled.
Thus, it is required to understand that the CEO plays a very significant role in any organization and appropriate information should be acknowledged about it.
Who is CFO?
CFO of any company holds the topmost position in terms of financial forecasting.
They are in charge of making critical financial decisions for the firm like budgeting forecasting etc.
As CFO of the organization, he is in charge of administering the financial department ensuring the financial health of the organization is not compromised.
CFO of any organization foresee any financial risk and take measures to address these risks.
Following are some roles of a CFO known:
- Administering the entire Financial Department
- Liable for mitigation of financial risk
- In Connection with financial investors.
- Liable to look only at financial decisions for the organization
- Look out for ways to see the organization’s financial growth.
The primary objective of CFO in any business is to ensure that there is sufficient cash surplus to support the organization’s strategic needs.
Therefore, it is equally important to also know, that CFO is quite important for any organization that is looking at financial operations, budgeting and financial reporting.
Thus, it is required to understand that CFO becomes important for any organization and proper information should be known about it.
Main Differences Between CEO and CFO
Although both the CEO and CFO are important for an organization.
However, the CEO and CFO have a lot of differences with respect to decision making.
- CEO looks at overall decisions, whereas CFO looks at financial decisions.
- CEO can be from any department.CFO should be only from the financial department.CEO foresee overall risks but CFO only looks at financial risk.
References
- https://www.clutejournals.com/index.php/JABR/article/download/7791/7855
- http://www.aaajournals.org/doi/abs/10.2308/ajpt-50666
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My name is Chara Yadav, and my goal is to simplify finance-related topics. Read more at my bio page.
