A corporate management structure is the base for the chain of command between a company and its employees. The structure also influences how an organization can implement its business plan and meet its goals. It also assists the firm in complying with regulations pertaining to labor and other laws. No matter what type of management structure is used by a company, it must constantly review and improve its command chain to meet the legal requirements of the country in which they operate.
Typically, the CEO bears the sole responsibility for corporate activities and is the one who approves contracts and other legally binding actions. The CEO is required to keep the board of directors apprised of risk, operations and strategic planning.
The board of directors have the responsibility of establishing the company’s policy and objectives, which must be in line with the needs of shareholders. The board must make sure that the company has sufficient financial resources to meet its objectives and make wise investments. The board must be sure that the company is satisfying the needs of all stakeholders, including customers and local communities.
Corporate boards may be made up of inside directors who are either shareholders or high-level managers from the corporation. Inside directors provide valuable insights into spearheading growth with holistic digital strategies the operations of the company and projects, from an internal perspective. Outside directors can offer valuable perspectives that can complement inside directors’ experience and expertise.
Larger companies can establish two-tier boards. They have an executive board that oversees daily activities and a supervisory board which is responsible for approving budgets and overseeing the most important corporate initiatives and projects. Two levels permit the separation between the managerial and executive roles. Limiting the number of directors on the board who have direct management roles within the business can reduce the likelihood of conflict of interest.