Who Does What? Understanding the Professional Roles Within a Corporation
For a corporation to function properly, all the players within it must fulfill their roles.
But what exactly are their roles? Most people are familiar with the terms “shareholders”, “officers”, and “board of directors”, but many people don’t know what responsibilities those positions fulfill. Below, you’ll learn exactly what the people in those positions do. Take a look:
These are simply the people who have invested in the company. In return for their investments, they’ve been given a share of the company, hence the name shareholder. Their share of the company is typically denoted in the form of stock, which is given a set value. Basically, the shareholders own the corporation. Generally, shareholders have the right to vote on major issues within the corporation and elect the board of directors. Corporations need not have more than one shareholder, and many newly-formed corporations do not.
Board of Directors
The board makes up the corporation’s governing body, which basically means that the board of directors sets the policies by which the corporation will adhere. The board of directors also oversees the actions of the officers. Typical decisions made by the board of directors are things like compensation policies, hiring and firing the CEO, evaluating officers’ performances, and determining dividends.
While the list of a corporation’s officers can be vast and filled with titles like Chief Investment Officer, Chief Information Officer, and Chief Operating Officer to name a few, there are several officer roles that all corporations need filled (even if in smaller corporations the one person plays all the roles).
- President or Chief Executive Officer (CEO)
This is the person in charge of the corporation’s daily operations. They oversee and manage the business. Their signature is typically required on important documents like business contracts and other binding legal document, as well as stock certificates. This person is also responsible for delegating tasks to the other officers.
- Treasurer or Chief Financial Officer (CFO)
As the title implies, this person deals with the money. In smaller corporations, the treasurer’s responsibilities may focus on things like payroll, paying and collecting on bills, and tracking how and where money is being spent and earned. In larger corporations, this person’s role tends to focus on greater oversight of financial operations.
This is who tracks official corporate records and keeps minutes for the board and shareholder meetings. This person also makes sure the company, and its board of directors, is complying with all relevant regulations and bylaws. In many corporations, this officer, as well as others, has a place on board.
As indicated above, some positions, especially in smaller corporations, are filled by the same people. In a single-person corporation, one person fills all the roles. The larger corporation, the greater the demands will be on each position.
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