Introduction
A corporation is business bodies that exists with legal rights that make it operate as an actual person. They may be sole corporations or aggregate that is composed by many people. Corporations have different levels of stakeholders. This includes directors, officers of the corporation and shareholders. These individuals have various specific duties that they perform. Corporations exist as either open or closed. Open corporations are those that permit there shares to trade publicly meaning that any individual can purchase their shares and have the advantage of getting voting rights in decision making and share in the companies shares and profits. Closed or private corporations are those with shares that are strictly held or they cannot be publicly traded to other people. An example of a closed corporation is a family business.
Duties of directors in a corporation
Directors are critical individuals in corporations. A public corporation, they are elected by stake holders while in a closed corporation, they may be appointed by the other shareholders. Directors have specific duties which include Duty of care which requires them to perform their duties diligently with reasonable inquiry in all their obligations such as allocation of funding, hiring of staff and other duties upon them
Directors have also other roles such as providing continuity to the corporation by executing legal set ups and representing it. They also interpret the corporation’s products and services while advocating for them. An important role of the directors is to select and appoint the chief executive officer and give him administrative duties of the corporation. They are also the ones who review and monitor the CEOs performance through specific job description. They also offer administrative direction to the CEO whenever needed.
In addition to this, directors also have the important task of governing the organization through policy creation after wide consultation with other stakeholders. Another important duty associated with the director is to provide finances to the company to fund projects. They will approve projects and ask for finances on behalf of the corporations. The last but most important duty is to account to all shareholders and public about the organizations losses and profits. They will also address issues of expenditures to the shareholders.
Officers of the corporation include the CEO or president, the vice president, the chief financial officer or the treasurer and the Secretary. The CEO has the responsibility of running the administration of the corporation on a daily basis including allocating duties to his juniors. He is the signatory officer on contracts, legal documents and other documents such as the stock certificates. The CEO duties are delegated to him by the board and he links the board with the administration of the corporation. Through corporate decrees, he acts on behalf of its management.
The vice president position does not exist on all corporations but where this position exists, he will work on behalf of the CEO in case he is not available. Sometimes, he is delegated with specific duties by the board of directors or the CEO. The Chief Financial officer is mandated by the corporation to oversee all financial issues of the business. Depending on the size of the corporation, he might be an overseer or have day to day responsibilities. He prepares and keeps all the financial records of the organization. These he presents to all the stakeholders of the organization. The organizations secretary keeps all corporate reports and records while at the same time preparing and taking minutes of the board and shareholders during their meetings. Incase of requests of corporate documents by banks and other legal organizations, he is charged to provide this documents.
Shareholders have an important role in the running of the corporations. In a public corporation or otherwise known as open corporations, shareholders have no decision making power other than voting in members of the Board of directors who make decisions on their behalf. In a private corporation, shareholders or a group of them are the main decision makers. However, the shareholders who have control over the corporation have to act with all fairness so as not to leave out the suggestions of non-decision making shareholders.
Conclusion
In conclusion, most corporations have the above structured duties for their stakeholders. However, some of them have a different approach towards the roles of their members. It is also important to remember that the officers of the corporations have no legally binding to the company, while the law indicates that the directors bare all responsibility of the corporation.
References
Carter, M. (2010). Overview of Roles and Responsibilities of Corporate Board of Directors. Retrieved February 19th, 2011 from http://managementhelp.org/boards/brdrspon.htm
All business. (2011).Officers’ Roles within a Corporation. Retrieved February 19th, 2011 fromhttp://www.allbusiness.com/business-planning-structures/business-structures/531- 1.html
