There are significant differences between the roles of the chief executive officer (CEO) and the chief financial officer (CFO), which are as follows:
- Responsibilities. The CEO is responsible for all activities within an organization, while the CFO is responsible solely for the financial side of the business.
- Reporting relationships. The CEO position is overseen by the board of directors, while the CFO position reports to the CEO.
- Strategy. The CEO is responsible for the overall strategy of the organization, as well as the tactics used to achieve that strategy. The CFO is responsible only for the financial support of the corporate strategy, which means ensuring that there is sufficient cash to support strategic needs, monitoring the profitability of the business, and mitigating its risk.
- Development. The CEO is responsible for finding and grooming personnel within the company for management positions. The CFO only does so within the finance and accounting areas.
- Liaisons. The CFO has a significant liaison role, since this individual interfaces with investors, bankers, lenders, and regulators. The CEO does not have any liaison roles, but is the public face of the business, making speeches and meeting with the press and community leaders as needed.
- Analysis. The CFO is responsible for reviewing all aspects of the business to see if the various operations are controlling costs in an appropriate manner, and whether resources are being allocated correctly. The CFO reports these findings to the CEO, who makes decisions about how to alter operations to make the firm more efficient and effective.