CHIEF FINANCIAL OFFICER

Chief Financial Officer



Chief Financial Officer

Introduction

A chief financial officer (CFO) is the most senior executive official within a company to have responsibilities for leading the organization's financial affairs, including the direction of its financial and managerial accounting and control functions, and often its treasury functions. He or she oversees the recording, analysis, and reporting of financial information internally and externally; administers its system of internal accounting control; counsels the organization's leadership on financial matters; and represents the organization to external auditors, tax and financial regulatory authorities, capital markets, and contracting entities (Brooks, 2000).

The complex regulatory frameworks that govern the work of a CFO and his or her organization call for (1) principled leadership in conformity with relevant financial, legal, and ethical standards and the organization's mission and identity; (2) prudential decision making and independent professional judgment in assessing, balancing, and managing risks; and (3) a demonstrable commitment to safeguarding and enlarging the organization's financial resources so that it will be capable of growth that can benefit the diverse stakeholder constituencies that contribute these and other resources.

Official Role, Reporting Relationships, and Qualifications

The CFO, as an executive officer of a corporation, is among its chief administrative leaders, and he or she serves at the discretion and pleasure of the chief executive officer (CEO) and the board of directors. By law, the corporate charter, and prudent business practice, the CFO and other officers join with the board of directors to guide the organization's strategic direction and provide important oversight regarding the integrity of its operations and financial reporting and control processes. Officers owe the corporation fiduciary duties of care, loyalty, and good faith in overseeing its affairs. For tax-exempt organizations, these fiduciary duties include as well a duty of conformity to the purposes and activities that form the bases for their exemption ...