What is a chief financial officer and what do they do?

The chief financial officer (CFO) is a member of the senior management team and assumes a strategic role in influencing the future direction of an organisation. They provide financial leadership and help to align business and finance strategy to grow the company and often drive change management or business improvement initiatives within the organisation.

CFOs are responsible for ensuring the finance operation is efficient and effective. They have primary responsibility for planning, implementing, managing and controlling all financial-related activities of the business, including business planning, budgeting, forecasting and negotiations.

These professionals must also perform effective risk management and ensure compliance with financial regulations. The CFO must also build and maintain strong relationships with lenders, banks, investors and other financial institutions.

Key responsibilities

Responsibilities will vary, but examples include:

  • Providing strategic recommendations to the CEO and other members of the senior management team.
  • Advising on long-term business and financial planning.
  • Providing leadership, direction and management of the finance and accounting team.
  • Managing the processes for financial forecasting and budgets, and overseeing the preparation of all financial reporting.
  • Ensuring credibility of the Finance operation by providing timely and accurate analysis of budgets, financial trends and forecasts.
  • Identifying and addressing financial risk for the company.
  • Ensuring legal and regulatory documentation is filed, and monitor internal controls and compliance with laws and regulations.
  • Establishing and developing relations with senior management and external partners and stakeholders.
  • Reviewing all formal finance (and occasionally HR and compliance) related procedures.

Why are they important?

The CFO uses their financial expertise in a strategic leadership role to create financial success for the company and its stakeholders. They ensure timely collection of revenue and raise the capital needed to grow, both of which keep the business funded. In addition, they manage the relationships with investors, lenders and key partners.

Skills needed for this role

CFOs must have excellent leadership and management skills, and be able to build and maintain relationships at all levels. Strong influencing skills are also key, as is sound judgement. CFOs should also have a high level of integrity and excellent problem-solving skills.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Advanced Performance Management

Advanced Audit and Assurance

Career opportunities presented by this role

The CFO role is the most senior level in the finance structure, but there are often opportunities to move to progress to CEO, or alternatively move between organisations.

Competencies

High level competencies required include:

  • Advisory and consultancy

    A. Gathers and understands financial and non-financial information to develop complete knowledge of the client business and the environment in which it operates.

    B. Provides expert advice that will add value to the business and gain advantage.

    C. Identify and advise on business partnering to develop strategic relationships to create opportunities, improve performance and solve business problems.

    D. Prepare and present business plans and advise on the actions to implement these plans.

  • Audit and assurance

    A. Advises on and communicates effectively the role and scope of audit and assurance engagements to relevant stakeholders.

    B. Applies regulatory, legal, professional and ethical standards relating to audit and assurance engagements.

    C. Plans and prepares for audit and assurance engagements.

    D. Performs effective audit, and assurance engagements.

    E. Reviews and reports on the findings of audit and assurance engagements.

    F. Guiding efficient and effective operations.

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

  • Data, digital and technology

    A. Identifies strategic options to add value, using data and technology.

    B. Analyses and evaluates data using appropriate technologies and tools.

    C. Applies technologies to visualise data clearly and effectively.

    D. Applies scepticism and ethical judgement to the use of data and data technology.

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

  • Leadership and management

    A. Applies appropriate leadership strategies to effectively deliver business objectives.

    B. Leads, motivates and manages people to optimise performance and effectiveness.

    C. Collaborates, supports and works to achieve the objectives of the organisation, applying appropriate digital technologies.

    D. Acts proactively and thinks strategically, in anticipating organisational needs, recognising the wider business environment and dynamics.

  • Management accounting

    A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.

    B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.

    C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.

    D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Strategy and innovation

    A. Applies business acumen and commercial awareness to deliver business objectives.

    B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.

    C. Evaluates, justifies and implements suitable strategic options.

    D. Adopts and applies innovative methods to implement strategy and manages change.