CEO vs CFO vs COO: How They Compare

May 22nd 2024 | Posted by Phil Scott

CEO vs CFO vs COO – what are the differences? A CEO leads the organisation, a CFO develops financial strategy, and a COO manages operations.  

Are you looking to expand your business and want more information about senior roles and what they can add to your organization? In this article, we explore the responsibilities associated with the Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Operating Officer (COO) roles.

We will explain the differences between roles and help you determine the right executive combination for your company.

Chief Executive Officer role and responsibilities

The CEO is responsible for the business overall and creates the organization’s vision, strategy, and direction. If you have a CEO in place, they make vital decisions regarding the business and are the public face of the organization.

Their principal areas of focus are,

  • Developing the organization’s long-term strategy and vision.
  • Making high-level decisions.
  • Ensuring the growth and ongoing success of the business.
  • Leading the executive team.

Chief Financial Officer role and responsibilities

The CFO is responsible for the financial aspect of the business, which includes financial planning, financial reporting, and risk management. The CFO has overall management responsibility for the business’s finance and accounting departments and ensures the organization’s financial health.

If you hire a CFO, their primary areas of focus are,

  • Creating the financial strategy and related plans for the business.
  • Creating forecasts and budgets and analysing the data.
  • Managing company investments.
  • Ensuring regulatory compliance and managing financial risk.

Chief Operating Officer role and responsibilities

The COO oversees the business’s day-to-day operations and implements the CEO’s strategy and vision by turning them into actionable plans. The COO is responsible for ensuring that business operations are efficient and effective. They work closely with other executives to make this happen.

Hiring a COO for your organization means they focus on,

  • Optimising the operations of the business.
  • Executing the CEO’s strategies and vision.
  • Overall management of business activities.
  • Coordinating activities across departments.

CEO vs CFO vs COO – Which Does Your Organisation Need?

Each executive role has its own areas of specialisation and focus. Whether you need these executives on board and which combination is optimum depends on your business’s position, strategy, and vision.

For example, if your organization is large and has a complex organizational structure, it’s helpful to have all three executives in place. If your business operates in a highly regulated industry, hiring a CFO in addition to your CEO makes sense. For businesses in operationally intensive industries like logistics, retail, and manufacturing, hiring a COO is a positive investment.

For startups and small businesses with budgetary constraints, having a CEO in place may suffice. This position can be revisited as the business grows.

In summary

A CEO makes high-level business decisions and develops the organization’s strategy and vision. For smaller businesses, having a CEO may be sufficient. However, as an organization expands and develops a more complex operational structure, bringing a CFO and COO on board makes sense. Doing so allows the CEO to concentrate on the overall running of the business while the COO focuses on managing business operations and the CFO focuses on ensuring the financial security and growth of the organization.