The CFO or Chief Financial Officer of a company or organization is responsible for the main aspects of a company’s financial decisions. Unlike a portfolio manager, financial analyst, or other money management type position, the CFO is next in line to the CEO in terms of power. This is because they usually have the final say about what financial decisions will be made within a company or organization. This highly coveted position is close to being the owner of a company and the amount of responsibility it entails for some would be overwhelming. To be a CFO, you must be highly ambitious and be a person who is fearless and unafraid to take charge when needed to steer ahead.
Requirements to becoming a CFO are similar to that of being a CEO. You must be administrative in your approach, a go-getter who is not afraid to have the power to make major decisions, and someone who is an absolute guru in finance. An MBA is usually preferred (though not required) and the CFO of an organization is usually chosen by the CEO, based on the needs of the company and the CEO’s responsibilities. Often, the CEO will hire someone he already knows to fill this role, and it may be someone he also feels close to, such as a former business partner or close friend. This is because he must trust the CFO will many aspects of the business and sometimes the CFO will even act as CEO while he is away..
Typical EducationThe best education an aspiring CFO could achieve would be an M.B.A. in Business Administration. This would give them the best, most complete background in high finance and teach the skills most needed to run a company from the financial aspect. Since so many of the decisions made in a company involve financial ones, there are times the CFO is even more important than the CEO and is often seen as second in command to a major corporation, along with the COO (Chief Operations Officer). The CFO often plays a prominent role in the overall success of a company and may also see a great deal of wealth due to profit sharing and investment equity or stock holdings.
An Alternate Route
If you do not have an M.B.A., and do not plan to obtain one, a Bachelor’s degree in finance, business, or related field would be second best. In addition, it is imperative that you have a great deal of business savvy and financial expertise. Someone who has owned his own business, for example, would possibly be a good candidate for a CFO position, because they will have had the experience to make major financial decisions for a company which will come in handy in the CFO position.
Steps to Becoming a CFO (Chief Financial Officer)
1) Get an M.B.A. in Finance or Business Administration. Although an M.B.A. is not actually required, this will best prepare you for the vast number of situations that a CFO might encounter on the job in a big company. If you cannot obtain an M.B.A., a Bachelor’s degree would be the next best thing.
2) Get experience in the Financial field or as a company owner (management position). It is important to note that the CFO, unlike many of the other financial money manager positions, is in one of the highest positions in a company, and is often considered next in line of power to the CEO. For this reason, it is important that you be a leader in many different ways, and able to take charge of high level important decisions to be made within a company. If you once owned a small or medium-sized business, this would be your best experience base for becoming a CFO of a large corporation.
3) Connect with CEOs and business owners. Your best chance of getting in as the CFO of a company is to know the CEO. CEO’s generally choose their CFO from the people they already know and trust in business, not a stranger they have no knowledge of. They are entrusting one of the most important aspects of their company to this person-their money and finances. So they must choose carefully. If you are friends or business associates with the CEO, you may be in his pool to consider if he decides to hire a CFO to handle the finances of his company.
4) Become an expert at financial and investment decisions. One of the primary duties of the CFO, besides the overall financial operation of a company, is knowing how to invest wisely. This may include both investing in financial opportunities, as well as investing in other companies. Someone who knows how to wisely invest and maximize ROI (return on investment), will see a higher personal reward for his efforts as a CFO.
5) Become a great manager/executive. Remember that the CFO is a manager and works closely with the CEO and owners of a company. Seeing yourself as a manager and leader is important to being able to achieve CFO status, since so many of the decisions you will make as the CFO will be significant for the company’s future.
The CFO of a company is a high level position which carries a great deal of responsibility. Often posing as second in line to the CEO or COO, the CFO makes many of the top financial decisions for a company. For this reason, they must be entrepreneurial in spirit, have a desire to lead others, and have a clear vision for the financial health and continual growth of the company they work for. If you have leadership ability, want to set the world on fire, at the helm of a big company, and have the courage to achieve this, consider making becoming a CFO your goal. Start with a solid financial education in Business Administration from a college of your choice. And remember, once you get your education, the sky’s the limit!