A corporation is the kind organization that is endowed with many legal rights which gives it the obligation to be viewed as a different entity from its owner. There are many types of corporations which are formed to perform different functions in the world. However, the fundamental concept of each of them is to achieve their long and short terms goals as stipulated in the organizational bylaws. In order to enhance the effectiveness in attaining its objective and goals, the corporation daily management is conferred to other officers who will manage it on behalf of the owners. These officers include; the board of directors, corporate officer groups and the shareholders. Therefore in this paper we will give a critical analysis of the respective role and responsibility of each category of corporate managers and to what extend their efforts cannot be undermined in attaining the corporation’s goals.
The Board of Directors
In most corporations the board of trustees are elected differently depending on the kind of corporation involved. In a business firm the board of directors encompasses not less than three persons who are elected by the shareholders in that corporation. On the other hand in Stock Corporation, the board of directors are appointed by the stock shareholders who form the supreme authority in the management (Blumberg, 1993). Irrespective of the kind of corporation the duties and responsibilities of board of directors depend on the power conferred to them by the authority outside itself as well as the bylaws in the organization. The executive board is given the mandate to oversee the overall running of the corporation.
It is responsible for formulating board policies and objectives; ensuring the corporation has adequate finance; elect or appoint new officers to manage the corporation; sell or buy property in the organization; review the performance of the chief officers; approving the yearly budget to the members; reviewing their compensation and salary as per the bylaws(Albert, 2008). In general they perform most of the activities in the corporation based on the power endorsed on them by the state permit.
It consists of the ex-officials of the corporations who are responsible for the daily operations of the organization. They hold seniors managerial position in the corporation such as the chief executive, chief financial officer and the treasurer.
a) Chief executive officer is responsible for signing contracts on behalf of the corporation, stocking of certificates and other legal document.
b) Chief financial officer is responsible for maintaining all the financial records of the corporation, preparing and presenting the financial reports to the members, board of directors and other officers in the corporation.
c) Secretary is responsible for maintaining all the legal documents of the corporation, preparing minutes during board and members meetings. The secretary is also charged with the responsibility of providing documents that involve any transaction with the financial institutions or banks and provide copies of corporate documents when required. The corporation officers most of the time acts in respect to the organizational bylaws and the charter accorded to them by the state permit.
They can be termed as the real owners of the corporation. They are not directly involved in the daily management of the corporation but have the noble role of overseeing how it is managed through the board of visitors. Shareholders are responsible for electing board of governors; unleashing new ideas to the directors; approving the general performance of the corporation; claiming of dividends and providing capital to the corporation.
The difference between publicly held corporation and closely held corporations
Closely held corporation also known as private corporations is a kind of corporation where its shareholders do not trade or sell their ownership shares to the public (Dignam and Lowry, 2006). In case it means that it can only sell part of its ownership to another corporation before being sold to the third party. Closely held corporation are not required to provide their annual reports to the registrars of corporation compared to the publicly held corporation (Bruce, 2003). The members in closely held corporation are tight held to each other thus forming the owners of such corporation. On the other hand publicly held corporations are owned by stock shareholders who may not claim to be the real owners of such corporation (Abdullah, 2004).