A corporate management structure determines the chain of command for a corporation and its employees. The structure also determines how well an organization is able implement its strategy and achieve its goals in business. It also helps the company adhere to laws regarding labor and other regulatory requirements. No matter what management structure a company has all companies must examine and improve their chain of command to ensure it meets the legal requirements for the countries they operate in.
Typically, the CEO has ultimate responsibility for corporate activities and signs off on contracts and other legally binding actions. The CEO must keep the board of directors informed of risks, operations and strategic planning.
The board of directors is accountable for website establishing the company’s general policy and goals which must align with shareholders’ interests. The board must ensure that the company has sufficient funds to reach its goals and make prudent investments. The board should also make sure that the company fulfills the needs of all stakeholder groups, including those of local communities and customers.
Corporate boards are comprised of shareholders, or senior managers who are inside directors. Inside directors offer valuable insight on company operations and projects, from an internal perspective. Outside directors can offer important perspectives that complement the inside directors’ knowledge and experience.
In larger organizations, two-tier boards may be implemented. A management board is responsible for overseeing daily activities while a supervisory committee will approve budgets and oversee the core corporate initiatives as well as projects. The two tiers can allow for the separation of managerial and executive tasks. It can also lower the risk of conflicts of interest by limiting the number of board members who are directly responsible for managing the company.