All the various stakeholders of a corporation have a duty to fulfill to the corporation. They also enjoy certain privileges and rights that are allocated to them by their obligation to the corporation, from the directors to the officers and down to the shareholders. While the officers handle the daily operations of the business, the directors are tasked with overseeing these operations while the shareholders are responsible for providing capital for the operations.
Board of Directors
In most cases the incorporator selects this team at the initial stages of incorporation, and then they are elected annually by the shareholders. The number of directors varies depending on the size of the corporation. In directing the corporation's affairs, the board participates in holding regular board meetings to discuss the progress of the incorporation. They are also tasked with approving specific corporate activities such as contracts and purchase or sale of assets. Their third duty is to amend the corporation's bylaws or articles of incorporation when the need arises. Their other function is to appoint the various officers responsible for the corporation's operations. They have the right to suspend or fire these officers should the need arise.
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Corporate Officers.
As earlier stated, these officers are charged with the day-to-day running of the business. The board of directors usually appoints them. The official positions vary depending on the size of the corporation, but the typical officers include:
Chief Executive Officer.
The CEO is also called the president. Being the head officer, they are tasked with the ultimate and overall responsibility for the daily activities. They also have the sole rights of signing major contracts and other legal documents on behalf of the corporation. They report to the board of directors. They also have the right to sit on the decision-making board as ex-officio members, or in rare cases, participate in the board's voting processes.
Vice President.
While this position may not exist in most corporations, the vice president also called the deputy CEO delegates on different or specific duties as assigned to him by the board of management. But their primary role, which is also their right in the corporation, is to fill in when the CEO is unavailable or represent them in meetings (Heathfield, 2016).
Chief Operating Officer.
The COO is charged directly with managing the business' daily affairs and reports directly to the CEO. They have the right to assign specific duties to the junior employees under their watch should the need arise.
Chief Financial Officer.
Sometimes called the treasurer, the CFO is charged either directly or indirectly, depending on the type of the corporation, with all the corporation's financial matters. This may include both oversight and daily responsibility of maintaining corporate financial records and preparing and presenting financial records to the board, other officers and shareholders.
Secretary.
The secretary is in charge of preparing, maintaining and keeping corporation's books of records, documents and minutes from board and shareholder meetings. They are also in charge of filling certification for banks or other financial institutions and provide these, or any additional copies of corporate documents when requested for.
Shareholders.
Since the shareholders are the owners of the corporation, they have an ownership interest in the company. Their primary duty is to provide the capital needed to run the corporation's operations. Since corporations are rather large and extensive to be catered for by a single individual in most cases, it takes the combined efforts of various individuals to pull in their resources together to sustain the business. A ‘share' therefore is the apportioned interest in ownership of the corporation. These shares may be owned privately by the initial investors in the case of a smaller corporation or sold to the public as the case mostly in large corporations (AllBusiness.com, 2018).
References
AllBusiness.com. (2018). Officers' roles within a corporation. Retrieved from https://www.allbusiness.com/officers-roles-within-a-corporation-532-1.html
Heathfield, S. (2016). What is a vice president's role? Retrieved from https://www.thebalancecareers.com/what-is-a-vice-president-s-role-1918288
