One common trait among nearly all students considering an online MBA degree is a desire to work within the management and leadership structure of a business.
For those in leadership positions, the executive suite is at the top of the career ladder. People in these positions, such as chief executive officer and chief financial officer, make critical decisions, which include both work taken on directly by the executives and tasks delegated to directors, vice presidents, and many other junior staff members. Let’s review the CFO position, from how to become a chief financial officer to job description, salary information, and more.
What is a chief financial officer?
A CFO is ultimately in charge of the finances and related decisions tied to them for a business entity. Ensuring financial information is accurately gathered and reported is a core responsibility, as is managing financial risk, maintaining insight into the current financial position, and developing or approving sound financial planning strategies. CFOs generally are the top leader of the company’s financial department and can serve in a public- or internal-facing role as a financial spokesperson. Specific responsibilities can vary significantly from one position to the next, depending on both the organization’s needs and the CFO’s skill set. However, holding ultimate responsibility over financial decision-making is a nearly universal concept.
A CFO can be seen as the head manager of a company’s financial managers and all of the staff who work under them. It’s important to note that these executives have a mix of high-level tasks and reporting responsibilities to manage. While the vast majority of day-to-day financial work will be handled by subordinates, critical decisions and planning for the future regularly lands on the CFO’s desk. Whether they largely work on it themselves or carefully review a finished proposal prepared by others can change based on CFO preferences and operational circumstances.
The leadership aspect is where some of the role’s most demanding and difficult responsibilities stem from. Because the buck stops with the CFO, they can be held responsible for mismanagement and malfeasance on the part of subordinates if it isn’t discovered and corrected in a timely fashion. CFOs generally have to be extremely knowledgeable about finance and related policies, as well as have strong leadership and reporting skills to capably serve in the role for the long term.
How do I become a chief financial officer?
Even with an advanced degree like an MBA, few people can secure a CFO position without substantial professional experience. While a few exceptions may exist for small, family-owned businesses and startup enterprises, the CFO role is generally reached after a climb up the corporate ladder. Consider that a financial manager, which is a lower-level leadership role, generally requires a bachelor’s degree at minimum plus five or more years of related experience as an accountant, financial analyst, or other role in the field. Because the size of a business and its corporate structure can vary greatly, the path to the position may change significantly from one company to the next.
In a general sense, the best path toward a chief financial officer role is to take advantage of any opportunities to move into financial leadership positions and produce consistent and positive results. Starting in a front-line position, progressing to a financial manager role, and then acquiring titles like director and executive vice president before reaching the top of the corporate structure is common. Additionally, it’s not uncommon for those seeking a CFO role to move between employers as higher-level positions open up. An advanced business degree isn’t a firm requirement but can help prepare professionals for the job, as well as serve as a distinguishing mark when moving up the corporate ladder.
What is the expected chief financial officer salary?
Salary and total compensation for top executives is highly variable. Stock options, equity, and other benefits won’t appear in a salary number, but can greatly increase the total value of the position. Some companies may rely heavily on such offerings, while others will only provide small considerations of this kind. With that in mind, the median salary for chief executives in the U.S. is $183,270 per year, according to the U.S. Bureau of Labor Statistics. PayScale reports that the average CFO salary is $130,236. This high level of pay is in line with the many responsibilities and high expectations placed on executives in nearly all situations. It’s worth noting that the yearly salary can be considerably higher at large and successful companies.
Taking the next step in your career with UAB
The University of Alabama at Birmingham is proud to offer an online MBA degree within a flexible, effective educational environment. Professionals who don’t want to leave their current positions and step off the corporate ladder nor ignore personal responsibilities can learn in their free time, setting aside nights, weekends, and other free periods to focus on education. To find out more about the UAB MBA program, get in touch with an academic advisor today.