A corporate management structure defines who is responsible for various areas of a business which allows the company to take advantage of economies of scale and coordinate its activities. For example an apparel manufacturer might have separate departments for men’s clothing women’s wear, children’s wear and men’s wear but one central marketing department. This divisional structure permits the departments to focus on their own specific product and market, while sharing information to ensure better coordination. This type of https://chartinglogin.com/virtual-data-room-for-corporate-restructuring/ structure however, could result in increased costs for employees and duplication of efforts such as when purchasing supplies for multiple divisions.
Corporations are legal entities that have stockholders and require an appropriate management structure in order to comply with regulations and safeguard the interests of stockholders. For this reason, most corporations have a multi-tiered management system of directors officers, shareholders and directors who oversee the company’s operations.
The CEO is at the top of the pyramid. He is responsible for signing contracts and other legally binding acts on behalf of his corporation. The CEO of a small-sized company could be the sole director or shareholder, as well the officer, or the founder. In larger companies the CEO is appointed by the board of directors.
The board of directors is comprised of elected representatives from stockholders who are accountable for the direction and policies of a business. They choose and oversee the performance of the CEO, and also manage succession planning. They also approve major business transactions and actions, such as contracts as well as asset purchases and sales as well as new policies and the list goes on.
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