Corporate Management Structure

A corporate management structure identifies who is responsible for various areas of a business, which allows the company to take advantage of economies of scale as well as coordinate activities. For instance a clothing company may have separate departments for men’s wear women’s, children’s and men’s wear, but a central marketing department. This divisional structure allows the departments to concentrate on their specific market and product while sharing information to facilitate better coordination. This type of structure however, could result in increased employee costs and duplication of efforts for example, when purchasing supplies for multiple divisions.

Corporate entities are legal entities and have stockholders. They require a specific management structure to comply with regulations and protect shareholders’ interests. For this reason, most companies have a system of multi-tiers of directors, shareholders and officers that manage the company’s business.

The CEO is at the top of the pyramid. He is responsible for signing contracts and other legally-binding actions on behalf of the corporation. A small corporation’s CEO might be the founder and sole director, officer and shareholder or in larger corporations they are appointed by the online data room: empowering remote collaborations securely board of directors.

The board of directors is comprised of elected representatives from the shareholders, who are accountable for the direction and policy of a corporation. They select the CEO, supervise his performance and plan for succession. They also approve important business transactions and activities including contracts, asset purchases and sales, new policies, etc.