Question

What are the responsibilities of the CFO? Discuss the characteristics & traits that create a successful CFO.

Answer 1

Key responsibilities of a CFO:

• Financial reporting:
  • The CFO is responsible for presenting and reporting precise historical financial information of his/her company. All stakeholders in the company including owners, analysts, bankers, employees and other members of management rely on the accuracy and timeliness of this information. The information serves as a platform for many further important decisions.
• Financial estimation:
  • The CFO is responsible for estimating the financial information of his/her company. He/She must able to model and forecast the company's various revenue streams on the basis of past performance and current trends.
• Capital allocation:
  • The CFO is also responsible for the company's present financial status. He/She must decide how to invest the company's money and determine the allocation of equity and debt financing based on current liquidity, current risk environment and future cash flows.

In addition to above responsibilties, the CFO should have deep understanding of business, integrity (ethical standards), react proactively to market movements, communicate effectively with all stakeholders and most importantly have a result oriented nature.

These all qualities make a CFO a successful one.