CFO (Chief Financial Officer)

The Chief Financial Officer (CFO), known in France as the directeur administratif et financier (DAF), heads an organisation’s finance function. The CFO connects reliable accounts, cash flow and financing choices with the business leader’s decisions. They explain what conclusions the results support and which risks to consider before committing resources.

The CFO oversees financial activities without necessarily producing every document themselves. They organise the team’s work, oversee accounts and forecasts, and present analyses that help management. Their role also includes discussions with banks, investors and other financial partners. Administrative, legal, employment-related or IT responsibilities need to be specified for each organisation.

In an SME, the role may remain very hands-on, working directly with the business leader. A subsidiary’s finance function has a degree of autonomy determined by the parent company. At group level, consolidation may be added to financial management responsibilities. The CFO title therefore does not, by itself, establish greater authority than the French DAF title.

DAF, RAF and head of accounting: who does what?

• The DAF leads the finance function and uses their analyses to support business decisions. It is important to specify what they can decide themselves and what they refer to management.
• The responsable administratif et financier, or RAF, may have similar responsibilities, with varying amounts of hands-on work and supervision. Their title does not automatically place them at a lower level.
• Accounting responsibility covers one part of the finance function. Finance leadership also covers forecasting, financing and the analysis of investment choices.

When comparing two roles, examine the activities overseen, the team available and the actual autonomy before comparing titles.

An effective finance function gives the business leader a useful understanding of the company’s position. Reliable accounts provide a foundation, but decisions also require forecasts and explanations of variances. The CFO connects this information, putting results into perspective alongside cash requirements, investment plans and available resources.

Maintaining visibility over cash flow

Monitoring liquidity and working capital requirements helps the business assess funding needs. Customer receipts and supplier payments feed into forecasts. When defining the role, specify who updates these forecasts, who analyses variances and who discusses financing with banks. Unclear responsibilities may leave management without anyone accountable for this overall view.

Hypothetical example: an SME is considering an investment while its forecasts of incoming payments are changing. The CFO compares several assumptions, examines their effect on cash flow and presents financing options to consider. The decision can then address both the project and its financing terms, with explicit assumptions.

Adapting controls and responsibilities

Internal control helps prevent risks and improve the reliability of information. Procedures should be consistent with the activities overseen and the risks identified. Responsibility for controls and the team’s work must be defined around these needs. Accumulating dashboards is not enough to demonstrate that management has useful information.

The way work is organised must also reflect the autonomy given to the CFO. Taking on operational responsibilities involves hands-on work and coordination. Where the company already has specialists, the CFO directs their work to inform decisions. In both cases, the responsibilities assigned must match the resources and authority granted.

• Oversee the reliability of accounts and financial statements, and their consolidation where the organisation requires it.
• Lead cash flow forecasting and identify funding needs.
• Organise budgets, reporting and variance analysis to inform management decisions.
• Assess financing options and the financial implications of investments or acquisition-led growth plans.
• Establish procedures and internal controls suited to the financial risks identified.
• Manage the finance team and allocate preparation, analysis and supervisory work.
• Present results and forecasts to business leaders and relevant stakeholders.
• Maintain relationships with banks and other financial partners.
• Lead improvements to the financial information system where this responsibility is part of the role.

Several educational routes can prepare someone for finance leadership. Apec cites, among others, a French master’s degree in finance, a business school course focused on accounting and finance, the French DSCG and DEC qualifications, and an engineering degree supplemented by studies in accounting and financial management. These routes develop different knowledge and skills. They are not a uniform requirement for every role.

Connecting learning with the work expected

Education should develop the ability to read financial statements, understand accounting mechanisms and analyse financing decisions. Knowledge of consolidation and international standards becomes relevant where the responsibilities assigned require it. In a very hands-on role, this knowledge helps, in particular, to move from accounting data to cash flow forecasts.

Experience develops this knowledge through different responsibilities: producing an analysis, overseeing its preparation or presenting a recommendation to management. Budgeting work develops the ability to discuss assumptions with operational colleagues. Organising the work of a finance team also requires experience in coordination and management.

From financial knowledge to team leadership

Leadership development complements technical knowledge. Managing teams, supporting changes in working methods and working with decision-makers contribute to this learning. These experiences involve explaining choices, addressing difficulties and acting within the limits of one’s authority. Moving to a company of a different size may require learning to take on new responsibilities.

To assess a CFO, you can adapt the following stages to the role’s responsibilities and autonomy.

1. Define the criteria before interviews

Describe the financial decisions expected, the work to be produced and the work to be supervised. Specify the team available, external support and the limits of the role’s authority.

Then rank skills by their importance to your organisation. A hands-on role in an SME and a role in a subsidiary governed by group rules do not call for exactly the same evidence. Choose observable criteria: explaining accounts, building a forecast, discussing financing and leading the team.

A candidate’s ability to clarify these expectations is a positive sign. Pay attention to answers that equate the job title with guaranteed autonomy.

2. Examine past achievements

Ask the candidate to describe a financial situation they personally handled. Have them clarify the information available, their team’s work and the decision they recommended.

Explore an achievement related to your needs: improving forecasts, financing an investment or organising internal controls. Ask what they produced themselves and what they supervised.

A strong answer distinguishes facts, assumptions and the limits of their involvement. A presentation that attributes every result to the candidate without describing their actions warrants further exploration.

3. Set a financial case relevant to the role

Hypothetical example: a company is preparing an investment and needs to update its cash flow forecasts. Give the candidate simplified data on the accounts, expected receipts and planned payments.

Ask them to identify missing information, compare assumptions and present funding needs. Adapt the complexity to the role’s responsibilities, particularly in relation to consolidation.

Observe whether the recommendation is consistent with the data. A convincing candidate explains the limitations of their analysis and the implications of changing an assumption. Probe any firm conclusion drawn from insufficient data.

4. Assess management and communication

Ask how the candidate would organise work between accounting, financial control and external partners. Have them specify which responsibilities they would delegate and which areas they would supervise directly.

Then invite them to present their analysis to a business leader without a finance background. Assess the clarity of the recommendation, the risks explained and their ability to respond to objections.

To assess management, examine a change in working methods they supported. Ask how they explained expectations and adapted their support to team members. A concrete answer describes the actions taken and difficulties encountered.

5. Cross-check the findings before deciding

Compare the evidence gathered with the criteria defined at the outset. Distinguish demonstrated skills from those that remain uncertain, and identify the support needed when taking up the role.

Use references to explore specific aspects of the candidate’s experience, such as the autonomy they exercised or their coordination of the team. Avoid reducing this stage to a general assessment of the candidate.

If your company lacks the necessary financial expertise, involve a suitably skilled professional in the technical assessment. Retain responsibility for judging how their conclusions match your leadership needs.