CFO

Hello guys! Welcome back! Today, we will discuss about CFO. Maybe some of us who have economic or finance background have heard about this terms, but not so sure about the others. So, what is CFO? CFO stands for Chief Financial Officer who is responsible for overseeing the financial activities of the company. CFOs provide leadership and coordination for the administrative, business planning, accounting, finance, and budgeting activities. CFO reports to the CEO (Chief Executive Officer). In some companies, CFOs supervise treasurers and controllers. The treasurer is responsible for handling cash flows, managing capital expenditure decisions, and making financial plans, while the controller is responsible for accounting function.

CFO in a company makes decisions for the stockholders. The decision must be good in financial peripheral from stockholder point of view. So, what is the fundamental goal of CFO? The fundamental goal of CFO is to maximize the current value per share of the existing stock that is owned by the stockholders.

In performing duties and responsibilities, CFO at least require four special skills, which are:

1. Chief Strategist

CFO will need to use real-time financial information to make crucial quick decisions.

2. Chief Dealmaker

CFO must be adept at venture capital, mergers, and acquisitions, and strategic partnerships.

3. Chief Risk Officer

Limiting risk will be even more important as markets become more global and hedging instruments become more complex.

4. Chief Communicator

Gaining the confidence of stock exchange and media will be essential.

Besides skill, there are others specification that CFO must have, such as:

1. Have a Master's degree in accounting or business administration, or business experience for more than 10 years in leading major company or division
2. Have experiences in partnering with executive team
3. Have a high level of written and oral communication skill

Base on the explanation, we can conclude the CFO has important role in company that is responsible for overseeing the financial activities of the entire company. To complete this task, CFO must have several special skills and experiences in business.

By Dera Hafiyyan

Reference:  

1. BusinessWeek, August 28, 200, p. 120.
2. Ross, Stephen A., Randolph W. Westerfield and Jefrey Jaffe. 2010. Corporate finance. 9th ed. New York: McGraw-Hill.