A corporation is a legal entity that is recognized by law as separate from any person or persons. In other words, corporations are comprised of groups of people who legally act as a single entity. Of all the business structures allowed by law, the corporation is the largest and most complex. A corporation begins life as an idea that is put into motion by a group of people called incorporators. Their job is to write the company bylaws (how it will be managed) and select a board of directors. They also file the necessary legal paperwork to formally incorporate in the state the company will have its headquarters. Once those three tasks are complete, the incorporators job is done.
Shareholders and Board of Directors
Once a corporation is up and running, shares are issued. These shares represent ownership of the company. A group of investors can own shares or they can all be owned by a single person. Because shareholders are owners, they have a lot of power. For example, they can select the board of directors, amend bylaws, approve mergers, and so forth.
The board of directors, on the other hand, are at the top of the company’s chain of command. By law, the board must meet regularly and keep detailed records of each meeting. The number of meetings required is usually dictated by the state they operate in. The board also elects the company’s officers. Officers elected include president, secretary, and treasurer. Other positions they can elect include chief executive officer (CEO), chief operating officer (COO), chief technology officer (CTO), and chief information officer (CIO). In many corporations, the same person will hold the title of president and chief executive officer.
Other Management Positions
Working directly under the officers will be the top managers for the company’s different departments. These managers usually have the label of vice president. Some of the departments they run may include accounting, sales and marketing, product development, research, and others. The chief executive officer oversees all of the departments and is responsible for not only the day-to-day operation of the company but also keeping the company headed in a direction that is profitable.
In short, the basic structure of any corporation is very much like a triangle. The shareholders, board of directors, and officers are at the top, then it goes all the way down to the lowest workers in the company.
Technology and Corporations
In today’s increasingly technology-driven world, corporations are eager to use whatever technological means they can to run more efficiently and make more money. For example, the internet plays a huge part in how corporations market themselves, sell goods and services, and even inter-corporate communication. Email is one of the most important tools corporate workers have because it allows instantaneous communication and information can be disseminated to as many people within the company as the sender wants.
Technology has also replaced a lot of tasks that were once paper-driven. For example, email has replaced paper memos, word processing programs have replaced typewriters, and project management software is used to keep projects flowing smoothly. They also might use a document management system to create, manage, track, store documents. Most DMS software can also track different versions of documents, recording when the document was changed and by whom.
The Corporate Mandate
Corporations can be complex entities that take hundreds, or sometimes thousands, of people to run smoothly and effectively. With the advent of high-tech tools, companies can get more work done in less time. From the board of directors on down, a corporation’s single goal is to make money. This is especially true if the company is publicly traded on the stock exchange. Shareholders demand profitability and have a very large influence on how the company is run.
by: Dennis Hung