Corporate Structure and Operations Order
Establishing the ownership, control, and authority of a corporation and the organization of different business units within the company.
Corporate Organizational Chart
Corporate structure refers to the organization of different business units (or departments) within a corporation. Also known as corporate governance, the corporate structure is how a business is organized to accomplish its objectives. The corporate structure of a business is important because it establishes the ownership, control, and authority of the organization.
The Roles in a Corporation and Operations Order
In order to understand the structure of a corporation, familiarize yourself with the different corporate roles and how they work together. Generally, they are represented by three groups: shareholders, directors, and officers.
- Shareholders: A shareholder, also referred to as a stockholder, is a person, company, or institution that owns the business–at least one share of a corporation’s stock, known as equity. A corporation may have a limited number of private investors, or a corporation can “go public,” meaning the general public can invest in the company in exchange for stock.
The shareholders elect a board of directors ⬇.
- Board of Directors: The Board of Directors does not get involved in the daily operation of the company. Rather, the Board is responsible for good governance practices and oversight responsibility across the organization in areas such as business and risk strategy, organization, financial soundness, and regulatory compliance. The board appoints officers to handle the day-to-day operations⬇.
- Corporate Officers (also called upper management): Officers handle the day-to-day affairs of the business and the overall direction of the company. Common officer positions include:
- President or Chief Executive Officer (CEO): The CEO reports directly to the board and is the highest manager of the corporation.
- Vice President or Chief Operations Officer (COO): The COO reports to the CEO and is responsible for daily operations, such as marketing and personnel.
- Treasurer or Chief Financial Officer (CFO): The CFO monitors and analyzes financial data for the corporation.
- Secretary: The secretary is responsible for maintaining corporate records and takes minutes at shareholder meetings.
- Working down from officers are the employees ⬇
- Employees: Employees are the directors, senior managers, middle managers, team leaders, and team members.