For decades, the leading role of a company’s Chief Financial Officer (CFO) was to provide operational and budgetary support as head accountant and bookkeeper. With the rise of globalization, increasing economic uncertainty, and the evolution of technology, the CFO position has evolved to include advanced roles in company strategy and innovation.
CFOs are now expected to serve as chief financial stewards, operators, and strategists, as well as catalysts to cut costs, drive revenue growth and ensure success, the accounting firm Deloitte said. As a C-suite executive reporting directly to the company’s Chief Executive Officer (CEO) or president, the CFO helps shape company policy and financial goals. To land a CFO role, applicants must meet numerous academic and professional prerequisites.
In addition to this advanced skill set, today’s aspiring CFOs should have a graduate level education such as an Executive MBA from Washington State University to help ensure they have the broad leadership knowledge required by the C-suite.
Qualifications To Become A CFO
Academically, CFO applicants should have an advanced degree in accounting, finance, or business. TopMBA.com, a career planning and degree ranking website, describes why employers find CFO candidates with EMBA degrees appealing.
“An EMBA allows graduates to bring newly acquired classroom concepts, knowledge and tools learned from peers and expert faculty to their manager’s workplace and apply them,” the article says. “Most executive MBA programs help participants learn more about themselves and their managerial style, which makes them more effective leaders on the job and in real time.”
The Association of Certified Chief Financial Officers (ACCFO) listed a few common competencies shared by effective CFOs:
• Financial foresight
• Financial and accounting computer skills
• Communication skills
• Perspective on risk
• Results-oriented nature
• Ability to keep up with latest financial trends, developments, and theories
• Knowledge of finance laws, regulations, and rules
• Ability to create and assess financial statements and budget documents
Duties And Responsibilities
In most companies, the CFO assists the Chief Operating Officer (COO) by providing budget management, cost benefit analysis, and financial forecasting. A CFO’s core duties can be divided into three main parts:
1. Controllership duties: Controllership involves presenting and reporting accurate and timely historical financial information. Shareholders, analysts, creditors, employees, and other stakeholders rely on the quality of this information to make future financial decisions.
2. Treasury duties: CFOs oversee the capital structure by determining an optimal mix of debt, equity, and internal financing. They are responsible for the financial conditions within a company and need to be aware of financial influences such as risk and liquidity when determining how best to invest the company’s money.
3. Economic strategy and forecasting: CFOs are also responsible for mapping out the company’s financial future. They must identify and report areas of financial strengths and weaknesses to board members and key stakeholders. Thus, economic forecasting – the process of predicting financial success – is another key facet of a CFO’s duties.
The roles of the modern CFO also have expanded beyond traditional accounting management into human resources and information technology.
Salary Range
A CFO’s salary depends on factors such as industry type and company size. The U.S. Bureau of Labor Statistics (BLS) reports as of May 2016, chief executives (including CEOs, CFOs, and COOs) earned a median annual salary of $181,210. The lowest earning ten percent of chief executives made less than $69,780, while those in the highest ten percent made more than $208,000.
As previously mentioned, executive responsibilities vary between industries, which affects the spectrum of compensation for CFOs. Another significant variable is company size, executives at large corporations generally earn more than those at smaller companies.
In addition to annual salary, compensation frequently includes benefits such as favorable stock options and performance bonuses. Many chief executives also enjoy the use of company cars, club memberships, expense accounts, and company-paid insurance premiums.
Job Outlook And Growth
Employment percentages for CFOs and their chief executive counterparts are holding steady. The BLS noted the number of chief executives employed would not waver by more than one percent by 2024. Even so, large metropolitan areas, such as New York, Los Angeles, Miami, and Dallas, are expected to continue hiring CFOs at a faster clip than smaller cities.
The lack of employment growth for CFOs and other chief executives can largely be attributed to the competitive nature of the positions and the limited opportunity for a company’s employees to become chief executives.
In such a highly competitive job market, applicants may need an edge over their competition. One way to stand out above the rest is to pursue an online EMBA degree.
About Washington State University’s online EMBA Degree Program
Washington State University’s Carson College of Business online Executive MBA degree is designed to build students’ aptitude for big-picture decision making. The WSU Executive MBA program delivers courses from an executive’s point of view in a fully online format to accommodate busy professionals. More than three-quarters of the EMBA online student body has more than ten years of management experience, providing ample opportunities for students to build broad perspectives on leadership while also expanding their professional networks.
Sources
Deloitte, Four Faces of the CFO
Joseph Michaels International, Job Description/Qualifications
TopMBA, 5 Benefits Of An EMBA To Your Employer
Association of Certified Chief Financial Officers, Characteristics of a Successful CFO
Robert Half, How to Become a CFO: 7 Steps to Guide Your Career Path
Investopedia, What Does a Chief Financial Officer (CFO) Do?