Almost everyone has learned what a CEO does. But there has also been a spike in new C-level careers in recent years, including a CFO, a COO, a CTO, a CIO, and so on. It’s easy to get confused and forget who does what. So here are a few key differences between a CEO and a CFO that will help you differentiate between the two once and for all.
CEOs’ Scope of Responsibilities Is Wider
CEOs and CFOs have to do much to succeed in their roles. They develop strategies, lead decision-making processes, and oversee the performance of teams across the company’s levels. Still, the amount of things among CEOs’ direct responsibilities is enormous, even compared to the tasks and processes that a CFO is in charge of.
A CFO is the head of everything finance-related. This implies that they lead the finance department, communicate with stakeholders about all things finance, and analyze financial risks, among other things. Basically, if a department or process has to do with finance in any way, it is under a CFO’s control. Also, a CFO is accountable to regulatory entities (such as the Securities and Exchange Commission).
If you think the list of CFOs’ duties is a lot, wait until you hear what a CEO is supposed to do. Unlike a CFO, they lead all departments and oversee all processes happening at the company. They communicate with all stakeholders on any topic, are in charge of the company’s public relations, head the company-wide strategy development, and more.
Professional Backgrounds Expected From a CEO vs. CFO Are Different
Due to the differences in their respective responsibilities, the expectations that most employers have for the candidates for the CFO vs. CEO positions are different. When applying, you’ll need to hire a resume proofreading service on Skillhub. But what should be on your resume varies depending on whether you’re aiming for a CEO or CFO job.
A CEO can come from basically any background as long as they have a successful business career to show off. For example, research reveals that one of the unexpected yet relatively common backgrounds among CEOs is the military. The discipline and stamina that a military career requires help them reach the heights of the business world.
In contrast, until recently, most CFOs had a typical accounting or finance career path. It’s still true for two out of three of them. But it’s becoming increasingly common to hire a CFO with a non-finance background. Companies are looking for outstanding leaders, and whether or not they used to be accountants is no longer the most critical factor.
The Company’s CFO Still Reports to the CEO
One of the main appeals of both the CEO and CFO positions is the “C” they have at the beginning and everything it entails. A CEO and a CFO are the leaders who enjoy significant autonomy in decision-making and are expected to fulfill their unique visions to maximize their companies’ performance.
That said, while a CEO is the first person in the company, a CFO is the unofficial second-in-command. A lot of the things that the CFO is in charge of are beyond the CEO’s expertise. Still, whatever the CFO does has to be based on the CEO-approved strategy, and the CFO is expected to confirm most of their decisions with the CEO before implementing them.
So if you’d like to be an uncontested leader above everything, a CEO is probably a better role for you. It might be more challenging than a CFO, and the amount of accountability might be overwhelming. But the creative potential of the CEO’s role is unparalleled. As a CEO, you’ll get to implement the boldest ideas; as long as they work, you’ll be celebrated for them.
Both Roles Are Prestigious and Well-Compensated, but a CEO is Still on the Top
Job seekers who value a high social standing and prioritize financial security will feel comfortable as a CEO and a CFO. As C-level positions, they are some of the most increased career opportunities one can have. In most cases, this means being respected and paid well.
But being a CEO is still the highest career achievement one can have in the business industry. This is an essential role in any company, whereas a CFO is only the second or third one (depending on the company). Many A-type personalities value the chance to be number one more than anything. If you’re one of them, it makes sense to aim for a CEO job.
Becoming a CEO is also a preferred option for employees who believe that the more money, the better. There’s nothing wrong with such a mentality; income is one of the measures of professional success. As a CEO makes, on average, twice as much as a CFO ($800,000 vs. $400,000), money-motivated employees would rather be a CEO.
A CEO Is the One Responsible for the Company’s Overall Performance
Finally, the weight of responsibility that a CEO has to deal with is unparalleled. A CFO may be in charge of a ton of things. But they aren’t the first people shareholders question once something isn’t going the way they’re hoping. As the first-in-command, the CEO is expected to ensure that the company performs well, whatever that means.
As a result, being a CEO is not an excellent idea for people who are easily overwhelmed or prioritize their work-life balance. Both a CEO and CFO are challenging positions best suited for true workaholics. But if a CFO might be able to have a relaxed work day at least occasionally, most CEOs never do. So think twice if the money and prestige are worth all the hard work and psychological toll.
Overall, the main difference between a CFO and a CEO is that a CFO is the head of everything that has to do with finance, while a CEO is the head of everything, period. The company’s CEO is its prominent leader, and even the CFO responds to them. Being a CEO might be more prestigious and financially appealing, but it’s also quite stressful.