Starting a new company can be an intimidating prospect for anyone, especially if you’re unsure about the roles and responsibilities of each person involved. Typically, a company has 4 levels in their hierarchy: The directors, corporate officers, managers and employees. However, within the roles of the directors and corporate officers, there are several other sub-roles, each which play an important role in the structure of a company. Here is a brief overview of their respective roles and responsibilities.
ROLES & RESPONSIBILITIES OF DIRECTORS
The directors are the uppermost level of the corporate hierarchy and appointed by the shareholders. They make strategic and operational decisions and ensure the company meets its statutory obligations. Responsibilities include:
- Acting within the powers given to them by the company’s constitution
- Promoting the business for the benefit of its members
- Exercise independent judgment in decision-making
- Exercise reasonable care, skill and diligence when it comes to company affairs
- Avoid conflicts of interests
- Ensure good corporate governance
There are usually 4 roles within the title of director: namely, the chairman, managing director, executive director and non-executive director.
- Chairman – Usually a non-executive position, the Chairman leads the unified board, ensuring that the principles and processes of the Board are maintained in line with the company’s policy. Usually
- Managing director – Responsible for the day-to-day management of the business. Reports to the chairman. The Managing director sits on the board and draws a salary.
- Executive directors – Responsible for the operational and business units, organisational effectiveness and implementation of the board’s policies, directives, strategies and decisions for key areas such as finance, sales and operations.
- Non-executive directors – Brings an external perspective and effective challenge to the board and provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests. Non-executive directors decides the salary for the Executive Directors.
ROLES & RESPONSIBILITIES OF CORPORATE OFFICERS
The corporate officers are the second level in a company’s hierarchy and are appointed by the board of directors. They manage day-to-day operations. There are several roles within the title of corporate officer, with the corporation statutes defining which positions are required.
- CEO – Oversees all of the day to day operations and acts as a primary spokesperson. The CEO signs stock certificates and other necessary legal document on behalf of the corporation and Board of Directors.
- Vice President – May not be a necessary position depending on the corporate statute. If required, they fulfill any specific requests given by the board or if the CEO is unavailable.
- Treasurer / CFO – Handles all of the financial matters and prepares the financial reports to share with the shareholders, officers and the board. Manages and sets the financial goals of the company, ensuring the company is following financial laws and regulations. For more information on our financial services, please read here.
- Secretary – Maintains corporate records, organises shareholders meetings and prepares board minutes. Provides certification for banks and copies of any requested corporate documents. For more information on our company secretarial services, please see here.
- COO – Oversees the company’s daily operations. The CEO and COO share many responsibilities but the COO’s primary duties include overseeing the operations first-hand, talking to individual managers and workers, hiring and promoting employees and determining priorities for projects.
- CIO / CTO – Manages all of the technology requirements of the organisation.
- Corporate Board Treasurer – Responsible for the financial health of the company but is not typically involved in daily operations. Their duties usually include managing the annual budget and providing oversight regarding financial audits.
- Other corporate positions can include: CMO’s (Chief Marketing Officer) and CAO’s (Chief Accounting Officer).
CONCLUSION
Running a business isn’t just about doing everything yourself; your job isn’t to reach your goal by yourself, instead it is to build a team to help you reach your goal. Once you have a better understanding of the roles and responsibilities of a company’s upper management, you will be able to form a team of your own to help your business thrive. If you have any questions, our friendly team is happy to assist you here.