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This article is written by Kashish Kundlani, a third-year student of (BBA.LL.B) Ramaiah Institute of Legal Studies, Bangalore. In this article, she discusses the roles and responsibilities of the CEO, COO, and CFO.


More often than not, a person joins a company with the aspiration of being in the top-level management one day, for example, becoming a famous CEO, COO or CFO of a company. But while all of us dream so big, we often forget that big dreams come with bigger responsibilities. It is not a cakewalk to be in the top-level management as it requires a lot of skills and experience regarding the particular position, but once you acquire these, it is not impossible to reach there.

To become a CEO, COO or CFO, one must know the roles and responsibilities, qualifications and many more things related to this which makes it clear for a person wanting to be at this position or desires to be at this position. 

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Who is the CEO, COO, and CFO?


CEO is a borrowed concept from the United States of America. CEO was first defined in Section 2(18) of the Companies Act, 2013.

CEO stands for Chief Executive Officer. He/she is the highest-ranked individual or a top-level executive of a company. The CEO of a company is responsible for the overall success of a business and making the top-level managerial decisions.

CEO is the public face of the company and also a link between the board of directors and operational managers. A CEO is elected by the board of directors. For the performance of a company CEO directly reports to, and is accountable to, the board of directors

Liabilities of a CEO

CEO is personally liable for any violation of the tax or any laws.

A CEO is also liable for every offence, even the offences based on negligence, with regards to the management. For instance, where the balance sheet shows a false or misleading statement or if there is any omission, the CEO will be liable. A CEO is also not allowed to show any interest in something which is in conflict with the company’s interests whereas he is also obliged to reveal if in case the conflicts have arisen to the members of the Board of Directors.


COO stands for Chief Operating Officer.

In the chain of command (hierarchy for reporting relationships) COO is at the second. In some organisations, COO is also known by other terms such as “chief operations officer”, or “operations director”, or “executive vice president of operations”.

The COO is the senior executive who has been given a job or a task for supervising the day-to-day managerial and operational function of a business. 

The COO focal point is to execute the business plans. The COO must help the company to effectively grow and ensure its financial strength. He is the person who is responsible for the management of the departments of a company which are production, marketing, and sales.

In general, COO acts as a supervisor and as a leader, his work is also to ensure that the organisation and employees are implementing the plans of the CEO.

The need for COO arises because the CEO is too busy and cannot invest his time on a day to day operations of the business. So, a COO is needed for the supervision and ensuring the smooth functioning of the day to day operations of the business and reporting it to the CEO.


CFO stands for “Chief Financial Officer”. He/She is the executive who is responsible for monitoring the cash flow, financial planning and all other financial work or activities of the organization.

The CFO is considered to be similar to a treasurer or a controller and also checks the accuracy of the financial reports of a company.

CFO assess the financial risk of a company. Also, analyse the financial strengths and weaknesses of a company and gives suggestions for its improvement.

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What qualifications are required?


To become a CEO  or a COO one needs a Bachelor’s degree in business or related subject with significant experience. Many organisations prefer choosing a person who has done an MBA.


To be a CFO a person requires a Bachelor’s degree in accounting, finance or economics and a high level of experience.

Structure of CEO, COO and CFO

There are many more in this hierarchy after CFO. But we will be dealing with only these positions except chairman.

Roles and responsibilities of CEO, COO and CFO



Is to design the strategies and policies for the organisation and to implement the plans prepared and also to guide the subordinates to accomplish the objectives of the company. 

The CEO’s role is also to organise, direct and control the goals made and also to support the strategic planning.


  • Planning, implementing, developing and directing the organisations operational and monetary function and performance towards the company’s vision and mission.
  • Acts as a strategic partner by developing and implementing the plans and programmes of a company.
  • Makes the necessary analysis and also make recommendations on a plan for the long term growth of a company.
  • Takes initiatives by introducing new strategies according to the need of a company.
  • Creates, improves, implements and enforces the policies and procedures of the organization that will enhance the operational and financial effectiveness of the company.
  • Effectively communicates with the organisation and with the Board of Directors.
  • Provides guidance and advice to others in relation to the execution of a plan or in a problematic situation.
  • On a continuous basis instruct the department by improving the planning and the budgeting process.
  • Evaluates the company’s financial, sales and marketing structure to plan for continual improvements and increasing of the operative efficiency.
  • To encourage the members of the company he on a daily basis interacts with them and mentor them.
  • Ensures that the company wherever it does business it maintains a responsibility towards the social environment.
  • He/She also analyses the risk and ensures that the necessary steps are taken to minimise it. 



The role of a COO varies from one organization to another. The COO often handles a company’s internal affairs. There is no well-defined list which gives a structure about the job requirements of a COO. A COO may be hired for executing strategies developed by the top management, to promote someone they can’t afford to lose or his role might be to oversee the organisations ongoing operation and procedure etc.

Responsibilities of a COO are not precisely fixed, it varies from company to company and also the nature of work company gives. Few of the common responsibilities are:-

  • Analysing the productiveness of the business strategies.
  • Establishing those policies where it helps to achieve the company’s vision and mission.
  • Handling the issues of the staff and also supervising them.
  • Developing and enacting the methods to meet the benchmarks and goals of a company.
  • Ensuring the production and delivery of the products on time.
  • Managing the working capital of the company.
  • Ensuring inventory management of a company.



  • Raising of funds- the CFO is the person who raises the funds of the company. It is up to the CFO to assess the need and find out the optimum and best way for raising funds.
  • Understanding the capital market- as a lot of risks are involved while trading in the capital or securities market, it is the financial officer’s duty to assess and calculate the risk and it is also up to the financial officer regarding the distribution of profits if earned.
  • Profit planning- for any business the primary objective is to earn a profit. So it is the duty of the CFO to plan about how to earn a profit and look after the judicial mix of the variable and fixed factors which can contribute to the profitability of the firm.
  • Should ensure that the funds raised are properly allocated.
  • Dispersal of profits- it the CFO who has to decide how much money should be retained back in the company as retained earnings and what portion is to be given to the shareholders as dividends out of the company’s profits.
  • Financial control-proper evaluation of funds is required to control the finance of a company.

The responsibilities of the CFO’s are:-

  • Provides the direction, leadership and management to the finance or accounting team of the company. 
  • Should develop financial and tax strategies.
  • Whenever it is necessary, the CFO should arrange for the debt and equity financing.
  • Should participate in key decisions which are related to finance as a member of the executive management team
  • Should look after the employee benefit plans with a particular emphasis towards maximisation of the cost-effective benefits packages.
  • Should report the financial results to the Board of Directors.
  • Should ensure that the record-keeping of the books of accounts meets the requirements of the auditors and government agencies.
  • Manage the departments of accounting, compliance, legal, tax, treasury and investors.
  • To look after the company’s business transaction processing systems.
  • Identifies the financial risks and opportunities for the company.
  • Provides strategic recommendations to the CEO and members of the executive management team related to the finance or budgeting issues. 


“Key managerial personnel” (in short KMP) as per Section 2(51) of the Companies Act, 2013. It gives the list of the following person to be considered as KMPs:-

With respect to the company, the major managerial employees are:-

  1. the Chief Executive Officer (CEO) or the Managing Director (MD) or the manager;
  2. the company secretary (CS);
  3. the whole-time director (WTD);
  4. the Chief Financial Officer (CFO); and
  5. such other officer as may be prescribed.

Key managerial personnel are the employees at the top positions in a company and KMPs have a great responsibility for the overall functioning of the company and also the duty to protect the interests of all the stakeholders.

KMPs also ensures that the company is in compliance with the various laws. They are the persons who have the authority and responsibility for planning, directing and controlling the activities of the enterprise.

CEO and CFO both are the key managerial personnel defined under Section 2(18) and Section 2(19).

COO is not considered as a KMP but in future, COO can be considered as a KMP if it prescribes. As the fifth point give the competent authority or government official to consider any officer as a part of KMP as may be considered appropriate at the time of assessment.

Pointers of Differentiation 


The CEO is the one who makes plans, policies, strategies for the company and the COO is the one who helps to execute these. 

CEO is the one who communicates with the stakeholders, investors and the public. He makes all the major decisions related to the company. COO looks after the day to day operation of the business.

CEO is at the highest level and COO is after him second in the chain of command. 


Responsibilities vary between the two as the CEO is responsible for all the activities of the organisation and CFO is only responsible for the financial activities.

The position of the CEO is looked after by the Board of Directors while the CFO has to report to the CEO. 

The CEO looks after all the personnel for their development while CFO only focuses on the development of the accounts department personnel.

The CFO has an important role as it makes connections with investors, bankers, lenders, and regulators on the other CEO is the face of the company and is involved in making public speeches and meets the community leaders as needed does not make any such connection as the CFO makes.

The CEO looks after all the reports and analysis all the aspects necessary to the business and makes decisions while the CFO is the person who reports the findings related to the funds to the CEO.


COO is the person in charge of the day to day operations of the business whereas CFO is in charge of the financial and economic planning of the business.

CFO decides where and when to invest and also assess the risk related to the company’s finance in order to increase the value of the company and COO is the one who executes the strategic plans made by the CEO of the company.

COO is also known as the Executive Vice President of Operations and CFO is known as the financial director.


After knowing the roles and responsibilities of the CEO, COO and CFO, one can be more clear with their dreams.

If their perspectives have changed after analysing the responsibilities, they can modify their dreams and chose other top-level positions, whichever suits their abilities.

The significance of the roles and responsibilities of CEO, COO and CFO put emphasis on the theory that somehow these three positions are interlinked.

It is difficult to carry out the objectives of the company without even one of them. Though the CEO is much more burdened with the responsibilities towards the organisation, COO and CFO act as a helping hand and COO is also considered the right-hand person of the CEO. 


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