Can someone please tell me what the roles and responsibilities are for these titles?
Chief Executive Officer
President
Vice-President (Senior and Junior Vice Presidents???)
Chairmen
Chief Operating Officer
Chief Financial Officer
Non-Executive Director
A couple of them I could guess what they do like Financial Officer probably looks after the budget and accounting, but others are fuzzy to me. And if you can think of any other executive titles that I’ve forgotten please let me know.
The Chief Executive Officer is generally the person who ultimately runs the entire company. You’ll often see people described as “President and CEO.” The CEO is responsible for supervising all the other people in your list and then some.
Vice Presidents generally are responsible for a specific function. In my company we have a VP of Finance, who spends all his time trying to keep the finance department running and the numbers added up; three Vice Presidents of the company’s operating divisions, who keep those divisions from falling apart; a Vice President of IT, whose job should be obvious; a VP of Marketing, who runs the marketing department; etc. etc.
A Chief Operating Officer is usually the person who answers to the CEO who is responsible for the business’s day-to-day operations. Not all companies have one; mine doesn’t, those jobs are handled by the VPs.
A Chief Financial Officer is the company’s head accountant. Basically, he’s the guy responsible for all the financial reporting, adding, cutting cheques, issuing invoices, etc. It’s a huge and difficult job. Again, not all companies have one - as in mine, this job could be called VP-Finance.
Now, a Chairman of the Board is a completely different thing, above all these ranks. A Chairman is the person who heads up the Board of Directors. The Directors are the people who the shareholders elect to represent them. The 1 zillion shareholders of GM elect a board of Directors to represent their interests - you can’t get 1 zillion people to vote on every business decision, right? - and the Chairman heads up the board. The CEO, CFO, and all those people answer to the Directors. Directors can fill those roles themselves, but more often than not they’re a seperate body.
So:
Directors (Including a Chairman)
give direction to
The Chief Executive Officer
who supervises
the COO, CFO, and Vice Presidents
who supervise
Junior VPs, nonexecutive directors, managers, etc.
And, more often than not, the Board doesn’t give direction to the operating officers so much as they give the seal of approval to what the officers present as their modus operandi and goals for the enterprise. At their annual meeting.
I believe “non-executive directors” are board members, other than the Chairman, whom are not also employed by the company in an executive role.
Unless it you mean the a company’s title of Director, which often falls between VP and Manager levels.
One other thought, that might help clarify the difference between the roles.
Many times, public companies have both a CEO and a COO. The CEO’s job requires alot of “external” focus - think of them as the top salesperson of the company - selling the company externally, and the management team’s vision and plan to achieve it to the board.
The COO “stays home” and oversees the “plant” (although it doesn’t have to be a manufacturing company). The COO is responsible for delivering product. The VP of Marketing is responsible for creating demand. The VP of Sales must deliver the revenue. The CFO is keeps the score (counts the beans). The CEO must make sure they are all singing from the same hymnal.
The Chairman and the rest of board represent the shareholders, and make sure the management team above manages their investments to receive an appropriate return.
When something breaks, shit flows downhill.
Then if it is a small company, one person does all that stuff and is referred to as: **Chief Cook and Bottle Washer. **
This is correct. The key role of the board is to exercise oversight over the big-ticket decisions of the officers. To elaborate:
For example, say Mr. CEO wants to acquire another company. Mr. CEO and his team, plus outside accountants, investment bankers, and lawyers (like me!) will contact the other company’s team (who will also bring in outside help of their own). Both teams will haggle and negotiate and work out an agreement. But before that agreement becomes enforceable [1] both companies’ boards of directors will have to approve of the deal. Depending on the size of the company, the size of the board, and the relevant state corporation statutes, the board will either approve the deal at an actual meeting, or by written consent. The meeting may be an annual meeting or a special meeting called just for the purpose of approving the deal.
Note that the target’s shareholders will most likely also have to approve, and the acquiror’s shareholders may also have to approve if the target is large relative to the acquiror’s size.
The board also appoints the officers annually (just as the shareholders appoint the board annually), so if the company starts to go downhill, the board may decide to axe the CEO and the other executives.
AZCowboy: I think you are thinking of “outside directors,” which are directors who are not (1) also officers of the company or (2) significant shareholders of the company. Most publicly-traded companies have outside directors, ostensibly to provide a dispassionate review of what management is doing, the idea being to prevent Enron-like shenanigans. The problem, at Enron and elsewhere, is that management makes recommendations for the board to the shareholders each year, and the shareholders usually approve those recommendations, so management basically gets to pick directors that will be compliant to their desires.
[1] This can be done by either not signing the agreement until the board approves or by inserting a provision into the agreement allowing for termination of the deal upon board disapproval.
Thanks for the responses you’ve helped me understand corporate structure. 