Legal regulations on the chief financial officer (cfo) of a joint stock company

The Chief Financial Officer (CFO) in a joint stock company plays a crucial role in managing and overseeing the company’s entire financial operations. Given the transparent nature of activities and the supervision by multiple shareholders, the CFO’s position not only ensures financial efficiency but also contributes to the company’s sustainable development strategy. Below, NPLaw invites readers to explore the legal issues related to the CFO of a joint stock company.

I. Understanding the Chief Financial Officer (CFO) of a joint stock company

The Chief Financial Officer (CFO) of a joint stock company is a person with the highest-ranking executive responsible for managing the company’s financial activities. The CFO’s role is not limited to controlling budgets and preparing financial statements, but also involves developing long-term financial strategies, ensuring transparency and efficiency in cash flow management, and assisting the Board of Directors and Board of Management in making investment, fundraising, and profit distribution decisions.

In a joint stock company, which involves many shareholders and frequently requires public finance reports, the CFO’s role is particularly important in ensuring compliance with laws and accounting standards as well as building trust with investors and the market.

II. Legal provisions on the Chief Financial Officer (CFO) of a joint stock company

1. Who is the Chief Financial Officer (CFO) of a joint stock company?

The CFO (Chief Financial Officer) of a joint stock company is the head of the company’s finance department, responsible for managing, operating, and supervising all financial activities of the company.

2. Standards and conditions to become the Chief Financial Officer (CFO) of a joint stock company

According to Article 15 of Circular 33/2024/TT-NHNN, to become the Chief Financial Officer (CFO) of a joint stock company, an individual must meet the following standards and conditions: 

- Must not fall into cases prohibited by law from holding the position of Director;

- Must have good moral character, honesty, and trustworthiness;

- Must hold at least a university degree in economics, finance, accounting, banking, business administration, or related fields;

- Must have at least 2 years of experience in an executive position at a credit institution or an enterprise with substantial owner’s equity;

- Must have at least 3 years of management experience in finance, accounting, banking, or auditing;

- Must have at least 5 years of direct work experience in finance;

- Must reside in Vietnam during the tenure.

Thus, to become a CFO of a joint stock company, candidates must meet professional ethics, academic, and work experience requirements as stipulated by law.

3. Responsibilities of the Chief Financial Officer (CFO) of a joint stock company

According to Clause 3, Article 162 of the Law on Enterprises 2020, the responsibilities of the CFO in a joint stock company include:

- Deciding on day-to-day business operations;

- Organizing the implementation of resolutions of the Board of Directors;

Executing business plans and investment projects;

- Proposing organizational structures and internal management regulations;

- Appointing and dismissing management positions;

- Deciding on salaries and benefits;

- Recruiting employees;

- Proposing plans for dividend distribution or loss handling;

- Performing other rights and obligations.

In summary, the CFO is not merely a financial manager but plays a key role in managing and developing the financial activities of a joint stock company.

III. Questions on the Chief Financial Officer (CFO) of a joint stock company

1. Is the Chief Financial Officer (CFO) of a joint stock company required to be the legal representative?

According to Clause 2, Article 137 of the Law on Enterprise 2020, the legal representative of a company can be the Chairman of the Board of Directors, Director, or General Director, depending on the company’s Charter. If the company has one legal representative, it will be the Chairman or Director/General Director. If the company has multiple legal representatives, the Chairman and Director/General Director will by default be the legal representatives.

Therefore, the CFO is not necessarily required to be the legal representative and may not concurrently hold such a role. 

2. Can a joint stock company hire an individual to serve as the Chief Financial Officer (CFO)?

According to Clause 1, Article 162 of the Law on Enterprise 2020, the Board of Directors has the right to appoint a member of the Board or hire another person to act as Director or General Director. Although the CFO is not a mandatory position under the Law on Enterprise, the company may appoint or hire an individual for such a role based on its organizational structure and operational needs.

Thus, a joint stock company can entirely hire an external individual to serve as the CFO, provided that the person meets professional and legal requirements.

3. Can one person simultaneously serve as the Chief Financial Officer (CFO) for multiple joint stock companies?

Under Articles 162, 65, and 12 of the Law on Enterprise 2020, there is no prohibition against a person simultaneously acting as director, general director, or legal representative of multiple joint stock companies, unless otherwise provided by the company’s Charter. However, companies may stipulate in their Charter whether to restrict one person from concurrently serving as director or general director of multiple companies.

Therefore, unless otherwise regulated by the Charters, it is permissible to hold the position of director or general director in multiple joint stock companies.

4. What are the roles and responsibilities of the Chief Financial Officer (CFO) in managing a company’s finances?

The CFO of a joint stock company plays an extremely important role in financial management and strategic financial planning. Specifically, the CFO’s roles and responsibilities include:

- Serving as a key strategic advisor to the CEO and Board of Management by providing accurate and timely financial reports to support strategic decision-making.

- Ensuring that proposed strategies align with the company’s long-term goals and adhere to financial principles, maintaining financial sustainability.

- Directly executing financial strategies, balancing costs, and maximizing profits.

- Leading and managing financial activities such as budget establishment, cost control, and cash flow and asset management.

- Building and maintaining relationships with financial partners, investors, banks, and credit institutions, influencing major financial decisions from fundraising to negotiating financial deals.

- Helping the company develop financial strategies to maintain stability and long-term growth, managing financial risks and establishing strong partnerships.

In short, the CFO of a joint stock company is not just a financial manager but also a strategic leader, advisor, and decision-maker ensuring the company’s sustainable growth. At the same time, the CFO acts as a diplomat in maintaining relationships with financial partners, building trust and supporting the company’s fundraising and investment activities.

5. Is the Chief Financial Officer (CFO) of a joint stock company required to be a member of the Board of Directors?

According to Clause 1, Article 162 of the Law on Enterprise 2020, the Board of Directors may appoint a member of the Board or hire another person to serve as Director or General Director. Similarly, the CFO is an executive position, not a mandatory position under the management structure stipulated by the Law on Enterprise. Therefore, holding the CFO position does not require being a member of the Board, unless otherwise specified in the company’s Charter.

6. What are the qualifications and experience requirements for a Chief Financial Officer (CFO) under the law?

To become the CFO of a joint stock company, a candidate must meet educational, experience, and ethical standards as specified in Article 15 of Circular 33/2024/TT-NHNN, including:

- Having good moral character, honesty, and trustworthiness at work;

- Holding at least a university degree in economics, finance, accounting, banking, business administration, or related fields;

- Having at least 2 years of experience in an executive position at a credit institution or enterprise with substantial owner’s equity;

- Having at least 3 years of management experience in finance, accounting, banking, or auditing;

- Having at least 5 years of direct work experience in finance, including accounting, banking, corporate finance, or auditing;

- Residing in Vietnam during the tenure.

In short, to become a CFO of a joint stock company, a candidate must not only have a solid academic foundation but also practical experience in finance and management, while complying with professional ethics requirements.

IV. Legal advisory services on the Chief Financial Officer (CFO) of a joint stock company

The above is an article by NPLaw on the Chief Financial Officer (CFO) of a joint stock company. With a team of experienced lawyers and legal experts, NPLaw is always willing to accompany, advise, and support clients on legal matters related to the CFO of a joint stock company. If you require assistance on this or other legal issues, please contact NPLaw via: