The Role of the Financial Manager

There are a lot of advantages and disadvantages in a company moving the Chief Financial Officer into the Chief Executive Officer’s position. The responsibilities of the Chief Finance Officer (CFO) of a company are extremely important and encompass all aspects of a company’s financial standing. The CFO has put together the company’s capital structure and responsible for communicating all plans to the investment community and the board of directors. The person who holds such a high position has to be very conscientious and accurate with numbers. The CFO has to have very good communication skills in order to help investors understand his or her financial plans. They have to have a strong accounting background and know how to use their knowledge of the company’s numbers to backup their financial ideas. They must be able to manage all other financial managers within the company and their perspective duties.

The responsibilities of the Chief Executive Officer (CEO) are they should be able to communicate well, be able to manager personnel, have strong leadership skills, intimately know and understand the company’s products, be versed in the company operations, provide guidance, set goals and inspire the company to meet those goals. The CEO must understand how to get an idea off the drawing board and onto the production line with support from his employees and if applicable the board. The CEO must have the ability to envision the direction he wants the company to go, assess the risk he is putting on the company, and make the decisions that are tough. Along with these tasks the CEO must keep his fingers on the pulse of the company and always be informed of what is going on.

CFOs can and do make a successful transition into the CEO position. The key ingredient seems to be that they cannot have financial tunnel vision. To successfully run an organization an individual needs to be more than financially savvy. So regardless of whether you were a former CFO or not, if you do not have the right attributes it is unlikely that you will succeed. Not all former CFOs have made successful CEOs in minds other than their own. For example, General Motors CEO Roger Smith has been greatly criticized in his decisions since becoming the top executive. In some cases, industry analyst contend, a financial background has hindered rather than helped. GM CEO Roger Smith was quoted as “brilliant” and much more sensitive to market conditions and trouble within the company than his predecessors but, he tends to