CFO vs CEO: Mapping the Journey from Financial Leadership to Corporate Helm

By Ashley FerroAugust 31, 2023

Did you know that only 13% of CFOs transition into the role of CEO?  

According to a Korn Ferry analysis, the odds are stacked against CFOs aspiring to the CEO's chair. But why is this the case, and what sets these two roles apart in the grand scheme of corporate leadership? 

In this comprehensive guide, we'll be covering:

We'll explore their responsibilities, power dynamics, and even their paycheques, all to answer one burning question:  

Can a CFO really become a CEO? And what are the differences and similarities?

What is a CFO? 

Chief Financial Officer (CFO) | ExpenseInA Chief Financial Officer, commonly known as a CFO, is the corporate officer responsible for managing the financial actions of a company. This includes budgeting, financial forecasting, investments, and risk management.  

In simpler terms, the CFO is the financial steward of an organisation, ensuring that the company's financial engine runs smoothly and efficiently. 

Key Takeaway: In the realm of CFO vs CEO, The CFO is the financial strategist, while the CEO is often the overall strategist. 

Responsibilities & Daily Tasks as a Chief Financial Officer 

The CFO wears multiple hats and juggles a variety of responsibilities.

Here's a breakdown of some of the daily tasks a CFO might handle: 

  • Financial planning: Creating and revising financial plans and budgets. 

  • Risk assessment: Evaluating financial risks and opportunities. 

  • Investment management: Overseeing the company's investment portfolio. 

  • Cash flow management: Ensuring the company has sufficient liquidity to operate. 

  • Financial reporting: Preparing and presenting financial reports to stakeholders. 

  • Regulatory compliance: Ensuring the company meets all its legal and regulatory financial obligations. 

Key Takeaway: The CFO is not just a number cruncher; they are a financial visionary responsible for safeguarding the company's financial health. 

Skill Set Required for a CFO 

To excel in this role, a CFO needs a unique blend of skills.

Here are some of the essential skills a CFO should possess: 

  • Analytical skills: Ability to dissect complex financial data. 

  • Strategic thinking: Capability to align financial plans with business goals. 

  • Leadership qualities: Strong managerial and decision-making skills. 

  • Communication skills: Proficiency in conveying financial information clearly to non-financial team members. 

  • Tech-savviness: Familiarity with financial software and data analytics tools. 

Key Takeaway: A CFO needs to be a multi-talented individual, combining financial expertise with leadership and communication skills. 

What is a CEO? 

Chief Executive Officer (CEO) | ExpenseInA Chief Executive Officer, or CEO, is the highest-ranking executive in a company. They are responsible for making major corporate decisions, managing the overall operations and resources, and acting as the main point of communication between the board of directors and the corporate operations.  

In essence, the CEO is the face of the company and the strategist behind its direction and growth. 

Key Takeaway: In the context of Chief Financial Officer vs CEO, the CEO is the ultimate decision-maker and the visionary, while the CFO focuses on financial strategy and health. 

Responsibilities & Daily Tasks as a Chief Executive Officer 

The role of a CEO is multifaceted, encompassing a wide range of responsibilities.

Here are some of the key tasks that a CEO typically handles: 

  • Strategic planning: Developing and implementing long-term strategies. 

  • Team leadership: Managing senior executives and fostering a positive work environment. 

  • Stakeholder relations: Engaging with shareholders, the board, and other stakeholders. 

  • Business development: Identifying new opportunities for growth and expansion. 

  • Crisis management: Navigating the company through challenges and uncertainties. 

  • Public relations: Representing the company in media and at industry events. 

Key Takeaway: The CEO is not just a figurehead; they are the operational and strategic linchpin of the company. 

Skill Set Required for a CEO 

The role of a CEO demands a diverse skill set that goes beyond business acumen.

Here are some essential skills for a successful CEO:

  • Visionary thinking: Ability to see the bigger picture and plan for the future. 

  • Leadership skills: Exceptional ability to lead, inspire, and manage teams. 

  • Decision-making: Strong analytical and decision-making skills. 

  • Communication: Excellent verbal and written communication skills. 

  • Adaptability: Ability to adapt to changing business landscapes and crises.  

Key Takeaway: A CEO needs to be a well-rounded individual, capable of strategic thinking, effective communication, and decisive action. 

CFO vs CEO Salary: The Financial Showdown You've Been Waiting For 

When it comes to the corporate ladder, the roles of CFO and CEO are often seen as the pinnacle of success.  

But how do their paycheques compare? 

Comparative Analysis of Salary Ranges 

Let's talk numbers. While both roles command impressive salaries, there's often a noticeable difference. 

  • CFO average salary: The average salary for a CFO in the UK is £161,605 per year. CFOs can also expect an average additional cash compensation ranging from £16,950 to £97,201. 

  • CEO average salary: According to a 2023 report, the median salary for a CEO in the FTSE 100 is £3.9 million, up from £3.4 million in 2021. 

Quick Stat: CEOs often earn up to 20-30% more than CFOs in similar-sized companies. 

Factors Affecting the Salary 

Several variables can influence the salary of both CFOs and CEOs.

Here are some key factors:

  • Company size: Larger companies generally offer higher salaries. 

  • Industry: Sectors like tech and finance often pay more than others like retail or education. 

  • Experience: More years in the field usually equate to a higher salary. 

  • Location: Salaries can vary significantly depending on the cost of living in a particular area. 

  • Performance bonuses: Both roles often include performance-based bonuses, which can substantially augment the base salary. 

Quick Stat: Performance bonuses can make up to 30-40% of a CFO's or CEO's total compensation. 

Who Holds More Power? CEO or CFO? 

In the corporate arena, power dynamics are as crucial as financial statements. One of the most intriguing debates is around the question:  

Who has more power, CEO or CFO? 

The Hierarchical Structure: Setting the Stage 

In most organisations, the CEO sits at the top of the corporate hierarchy, reporting directly to the board of directors.  

The CFO, on the other hand, usually reports to the CEO.  

This structure might suggest that the CEO holds more power, but the reality is often more nuanced. 

Shared Power: The Decision-Making Dynamic 

Both the CEO and CFO have distinct realms of influence, making the power dynamics complex.  

Here's how: 

  • CEO: The CEO is responsible for the overall vision and strategy of the company. They make decisions that affect all departments, from marketing to human resources. Their power is broad but can be checked by the board of directors. 

  • CFO: The CFO has a more specialised role, focusing on the financial health of the company. While they may not have the same breadth of influence as the CEO, their recommendations often carry significant weight, especially when it comes to investments, budgets, and risk management. 

Key Takeaway: The CEO may have a broader scope, but the CFO's specialised knowledge gives them substantial sway in financial decisions. 

CFO vs CEO vs COO: The Corporate Trinity 

CFO vs CEO vs COO | ExpenseInOne question that frequently arises is how the roles of CFO, CEO, and COO differ. 

So, let’s introduce the often-overlooked COO and compare these three C-suite roles.  

What is a COO? 

While the CEO is the visionary and the CFO is the financial guru, the COO - or Chief Operating Officer - is the operational wizard. They are responsible for the day-to-day running of the company, ensuring that the business operations align with the company's strategic goals. 

Quick Fact: The COO often serves as the CEO's right hand, focusing on internal operations while the CEO looks outward. 

The Roles: A Side-by-Side Comparison 

To truly understand the CEO vs CFO vs COO dynamic, let's put these roles under the microscope:

  • CEO (Chief Executive Officer): The grand strategist, responsible for overall vision and long-term goals. They are the face of the company and the ultimate decision-maker. 

  • CFO (Chief Financial Officer): The financial architect, tasked with managing the company's finances, from budgeting to risk assessment. 

  • COO (Chief Operating Officer): The operational expert, overseeing the daily operations and ensuring efficiency and effectiveness in all business processes. 

Can a CFO Become a CEO? 

Traditionally, CFOs have been seen as the number-crunchers, while CEOs are the visionaries.  

However, the lines are blurring.  

A McKinsey report reveals that one in five CEOs in the UK once served as a CFO. This trend isn't just a UK phenomenon; it's mirrored in the U.S. as well.  

Interestingly, 70% of these transitions occur when companies are in a state of financial or strategic flux, such as during mergers or turnarounds.  

Quick Stat: The path from CFO to CEO is most common in the financial sector (25.5%) and least common in the retail sector (3.6%). 

Real-Life Examples: From CFO to CEO 

CFO & CEO Collaboration: The Symbiosis of Leadership 

The collaboration between a CFO and CEO is often likened to a critical partnership that can make or break a company.  

But what does this collaboration look like in the real world? 

David Axson, Managing Director at Accenture Strategy, was quoted in a Forbes article saying: 

"In virtually every company we look at, the CFO is becoming the second most important C-suite executive. An effective leadership team depends on the CEO and CFO being a great double act."  

This statement underscores the growing importance of the CFO in today's corporate landscape and the need for a synergistic relationship with the CEO. 

Another compelling point comes from an HBR article, which discusses the tension between a CFO and a sales chief. The article notes:  

"The tension between them - and their teams - has been having a ripple effect on the rest of us."  

This highlights the far-reaching impact of the CFO-CEO relationship, not just on the executive team but on the entire organisation. 

The Power of Collaboration 

  • Strategic cohesion: The CFO's financial insights combined with the CEO's vision can lead to a more cohesive and effective business strategy. 

  • Risk assessment: Collaboration allows for a more balanced view of risks, ensuring that both financial viability and strategic ambition are considered. 

  • Operational harmony: When the CFO and CEO are in sync, it creates a ripple effect, leading to smoother operations and a more unified workforce. 

Key Takeaway: The CFO and CEO need to be more than just cordial; they need to collaborate effectively for the betterment of the organisation. 

The Perfect Harmony of CFO & CEO Roles 

In the grand orchestra of a corporation, the CFO and CEO are akin to the conductor and the lead violinist.

Individually, they are masters of their domains, but together, they create a symphony that resonates with every stakeholder, from the boardroom to the break room. 

The journey from CFO to CEO is not a pipe dream but a tangible reality, as evidenced by real-world success stories. The salary, power dynamics, and collaboration between these roles are the lifeblood of corporate success. 

As we've explored the multifaceted relationship between CFOs and CEOs, one thing is clear: the future belongs to those who can harmonise strategy with financial acumen, vision with viability, and leadership with collaboration. 

So, what's the next step in your journey to mastering the CFO-CEO dynamic? 

If you're a CFO or CEO eager to elevate your game by streamlining financial processes and fostering collaboration, book a demo with ExpenseIn today to discover how our cutting-edge solutions can complete your corporate symphony.