Corporate Management Structure
A corporate management structure is the foundation for the chain of command between a company and its employees. The structure can also impact the ability of an organization to implement its business plan and achieve its goals. It can also help the company to comply with the laws governing labor and other regulations. Whatever management structure is used by the company, it must constantly evaluate and improve its chain of command in order to comply with the legal requirements of the nation in which they operate.
Typically, the CEO holds the sole responsibility for corporate activities and sign off on contracts and other legally binding actions. The CEO is required to keep the board of directors apprised of the business, risks and strategic planning.
The board of directors bears the responsibility of establishing a company’s policy and goals, which must be in line with the needs of shareholders. The board must ensure that the company has sufficient financial resources to meet its goals and make sound investments. The board must also be sure that the company is meeting all stakeholder needs including those of its customers and local communities.
Corporate boards can be composed of inside directors who are either directors or high-level managers of the corporation. These inside directors can provide invaluable insight into the company’s activities and projects from an internal perspective. Outside directors can also contribute valuable perspectives that complement the experience and expertise of inside directors.
Larger companies can establish two-tier boards, with an executive board that oversees the day-to-day activities, and a supervisory body that is responsible for approving budgets as well as monitoring the most important corporate initiatives and projects. Two tiers of boards can enable the separation of executive and managerial duties. Limiting the number of using digital rooms effectively board directors who have direct management duties within the company could minimize the chance of conflicts of interests.