CFO - Chief Financial Officer

The Chief Financial Officer (CFO) is the senior executive who heads a company's finance function and is recognised in law as one of its Key Managerial Personnel (KMP). Under the Companies Act, 2013, the CFO is defined in Section 2(19) as "a person appointed as the Chief Financial Officer of a company" and is listed among the KMP in Section 2(51). The role typically covers financial planning, treasury and risk management, statutory accounting and reporting, taxation, budgeting, and investor relations, with the CFO reporting to the Board and usually to the Managing Director or CEO.

Legal basis and who must appoint one

Section 203, read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, requires every listed company and every other public company with paid-up share capital of Rs 10 crore or more to appoint a whole-time CFO. The appointment is made by a Board resolution, and for listed companies any appointment or change is disclosed to the stock exchanges under the SEBI (LODR) Regulations, 2015.

Key statutory duties

• Signs the company's financial statements and is associated with the Board's report under Section 134.
• Along with the CEO, certifies the correctness of financial statements and the effectiveness of internal financial controls under Regulation 17(8) of SEBI (LODR).
• Oversees compliance with accounting standards, income-tax, and GST obligations.

Because the CFO is an "officer" and can be treated as an "officer who is in default" under Sections 2(59) and 2(60), they may be held personally liable for specified financial and reporting non-compliances.