Business Article - Your board of directors and their responsibilities
What are the responsibilities of a company's board of directors? A board of directors is the group of people who are most directly responsible (legally responsible) for the governing of a corporation. The board of directors is generally responsible for setting the policies and objectives of a company. They provide a sense of stability and continuity for the management of the company, and they are often charged with representing the company to its stockholders. The board of directors is seen as having a responsibility to the public for the actions of the company. The board of directors is also responsible for choosing the Chief Executive Officer of the company (itself a member of the board of directors), who then reports to the board on how the company is being run and what kind of growth is being achieved.
A chief financial officer, or CFO, is one of the key members of a board of directors. The chief financial officer's duties all involve managing the finances of the company to make sure that risks are minimized and that the company is able to successfully maintain secure streams of revenue and stay in the black. Aside from handling risk, the chief financial officer is in charge of financial planning: helping to determine realistic future goals, come up with methods of reaching them, and determine whether the goals are reached or not when the time comes for evaluation. Another further responsibility of the chief financial officer is the financial record keeping of the company. In the case of a public corporation, financial record keeping must be done according to a strict set of rules and the chief financial officer is in charge of making sure that all of the proper financial filings are made and that the financial processes of the corporation are fully transparent and reported.
Another of the primary members of a corporation's board of directors is the CMO, or chief marketing officer. In the simplest terms, the chief marketing officer is responsible for marketing the products that the company produces. In greater detail, the chief marketing officer is responsible for such things as public relations, advertising, organizing market research, handling other public facets of the company's relationship with its customers (customer service), and usually shares responsibility for product development and pricing. Many of the other aspects of the company, like production, finance and legal have a direct impact on the responsibilities of the chief marketing officer, so the CMO has to have excellent communication skills and be able to work constantly with others.
The chief human resources officer is, as the name suggests, the head of human resource management. The HRO is in charge of hiring and maintaining the company's work force, as well as making sure that they are satisfied with their jobs so that they work as effectively as possible and retention of employees is maintained at a high level. The human resources officer is in charge of planning for future additions to the staff and helping to ensure that the company has enough physical resources and facilities to handle the influx. Human resources is important at all times, but a human resources officer is particularly critical during times of growth, when many new employees have to be added, job definitions have to be adapted, added to and altered, and the structure of the company is being streamlined to accommodate changes in scale.
The chief operations officer, or COO, is the person responsible for handling the day to day operations of the company. While the CEO is the highest ranking officer for making final high-level decisions, the chief operations officer is more involved in making daily decisions that affect the low level policies and business processes in all parts of the company. The chief operations officer works closely with the chief executive officer to institute the policies that the board and the CEO have decided upon throughout the entire corporation uniformly.
Chief medical officer, or CMO, is a position which exists within large organizations to handle health issues among the employees. In cases where a company's activities have an impact on the health of their customers or their local environment, a chief medical officer may also have responsibilities between the company and the public. Chief medical officers generally come from a background in medicine and may be required by law to be a trained doctor.
A chief legal officer is in charge of the legal affairs of a corporation. Larger corporations need a chief legal officer to help maintain their legal policies and deliver opinions on situations where the company is sued or otherwise challenged in court. Chief legal officers are also of great importance in ensuring that a business keeps its status as being a publicly traded corporation on a stock market. In such a case the chief legal officer has to take care of the company's legal filings with government bodies so that they corporation may remain a publicly traded corporation in good standing.
A chief communication officer or CCO's job is to take care of communications both inside and outside an organization. Some of a chief communication officer's responsibilities may be technological - for example, making sure that the company has the right technology linking its offices so that communication can take place on a daily basis unimpeded. A chief communication officer may also have a responsibility to handle changes in infrastructure and policies of information handling between parts of the company. Finally, the chief communications officer may play in important role in the public affairs of the company, helping to handle all publicity and determine the state of the corporation's public face. The chief communications officer's job is vital in a publicly traded company, because when a company begins to sell stock it has a responsibility to continually keep its shareholders informed of its actions. The CCO is in charge of representing the actions of the company to the shareholders, taking note of the thoughts and opinions that the stockholders have and acting as one of the lines of communication between the minority shareholders and the board of directors.
Finally, the chief executive officer is the highest ranking of all corporate officers on the board of directors. Usually the chief executive officer is also the head of the board of directors (i.e. chairman of the board), and is selected by the board of directors. The chief executive officer will have the final say and the final responsibility for any and all matters having to do with the well-being of the company. Most of the chief executive officer's decisions will be high level strategic decisions, and day to day affairs in the various sections of the company will be carried out by the chief operations officer (who may also be referred to as the President of the company), who reports directly to the chief executive officer. The other chief officers may be selected by the board of directors or by the chief executive officer depending on the internal rules of the company, and generally they all report directly to the chief executive officer. While the chief executive officer is the highest ranking person in the company, he is expected to run the business in the way that has been agreed upon by the board of directors and may be removed if he goes against the decisions of the shareholders.
Some boards of directors have other types of chief officers which do not exist in all companies but are specific to certain industries or to companies of a certain size and culture. Some of the other types of chief officers which exist are chief analytics officers, chief software architects, chief compliance officers, chief creative officers, chief data officers, chief diversity officers, chief engineering officers, chief global strategists, chief governance officers, chief knowledge officers / chief learning officers / chief information officers, chief networking officers, chief privacy officers, chief science officers and chief visionary officers. The definitions of all of these types of officers differ somewhat from company to company. One of the least consistently defined job descriptions is that of the chief information officer. Many people say that the acronym for chief information officer, CIO, also stands for "career is over", as a chief information officer often has a vague job description and the rate of turnover for chief information officers is roughly every five years. As a company gets larger and larger the number of necessary chief officers on the board of directors becomes greater as well. Large corporations may have need for people to fill even more management responsibilities that haven't been touched upon here; the jobs that have been covered here, however, are among those which are vital for practically all companies as they increase in size and number of employees, and as you can see the board of directors plays a vital role in keeping a growing company on a steady bearing and taking care of the people who work for it during the course of their day to day duties and responsibilities.