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Corporate Management Structure

A corporate management structure establishes the chain of command for a company and its employees. The structure also determines how well an organization can execute its strategy and meet its business goals. It can also aid the company in ensuring compliance with labor laws and other governing laws. No matter what management structure is used by an organization, it should always be evaluating and improving its chain of command in order to meet the legal requirements of the country in which they operate.

In most instances the CEO is responsible for all corporate activities. He or she also signs contracts and makes other legally binding decisions. The CEO must inform the board of directors of operations and risks, as well as strategic planning.

The board of directors is accountable for establishing a company’s overall policy and objectives that must be in line with shareholders’ interests. The board must ensure that the business has the financial resources to achieve its objectives and make sound investments. The board must also ensure that the business is meeting the needs of all stakeholders including customers as well as local communities.

Corporate boards could be made up of inside directors who are directors or high-level managers of the company. Inside directors provide an invaluable perspective on the company’s operations and projects from an internal perspective. Outside directors can also contribute valuable perspectives that can complement the knowledge and experience of inside directors.

Larger companies may enact two-tier boards, which include the management board overseeing daily activities and a supervisory body that is accountable for approving budgets as well as monitoring key corporate initiatives and projects. The two tiers may facilitate the separation of executive and managerial duties. It can also lower the risk of conflicts of interest by limiting number of board members that are directly accountable to management of the company.

VDR: a key player in strategic information management