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Duties of directors in a corporation
Directors roles include coming up with values that the corporation needs to promote and develop goals to be achieved in the company. They also determine the corporation’s vision and mission. Directors of corporations play the following roles. They are supposed to act within their powers to ensure the corporations they lead run in accordance with their constitution as stipulated in the articles of association. They are mandated to act in true faith to ensure stakeholders’ interests are achieved.
Directors are supposed to carry out their duties in a competent and professional manner. Directors are supposed to direct other, senior, and junior staff in a way that will make the organization achieve its objectives. Directors’ roles include ensuring the companies engage only in lawful business dealings. They should ensure they exercise fair judgment to all stakeholders. They need to ensure organization properties are secure and are not misused them. The director’s role includes ensuring employees and stakeholders do not have a conflict of interest in the corporation.
Duties of shareholders
The shareholder’s roles include providing capital to the organization; they appoint directors of the company. Shareholders prove the corporate budget and the company’s external auditors. They also make key decisions in the company; this is, for example, when the corporate wants to take over another company or when making a merger. Shareholders’ duties include attending meetings called upon by directors. It is shareholders’ mandated to remove and replace directors whose term has expired or who misuse the company resources.
Duties of Officers
There are several officers within the organization. They include:
- Chairperson of the board: The chairperson position is of considerable importance. His roles include that of the managing board of directors and are its facilitator. He calls upon board meetings and presides them. In case there is a tie in voting chairperson gets a second chance to vote thus breaking the tie.
- CEO or the President: Corporation president’s role is to ensure the corporation’s day-to-day activities run smoothly. CEO signs significant contracts on behalf of the corporation. The CEO signs any legal document. CEO does participate in board meetings though he has no voting rights (Loos, 2010).
- Vice president: He acts on behalf of the CEO, mostly when the CEO is absent he makes a decision on behalf of the CEO.
- Chief financial officer: He is responsible for the matter concerning finance in the company. The chief financial officer maintains corporation financial records as well as presenting these records to the board and shareholders.
- Secretary: The main duties of this officer are to take corporation minutes and maintaining records of the corporation. The secretary should avail of certification to financial institutions such as banks. Secretary of the corporation avails information to agencies with interest to corporation affairs and public.
Difference between a publicly held and a close corporation
A public company is a company whose ownership is in public hands. Individuals purchase shares of a public company and become shareholders thereby becoming owners’ of such a corporation. In publicly held companies, ownership shares are traded publicly on the international stock market. Shares of publicly owned companies are easy to buy and sell through brokers. Shareholders who restrict other individuals from accessing the shares, on the other hand, own private companies fully. Incase a shareholder needs to sell his shares he has to give first priority to existing shareholders. Closely held corporations are not subjected to strict requirements as the public owned corporations (Sharma, 2010).
Loos, A. (2010). Directors Liabilities:A World Review. Chicago: Kluwer Publishers.
Sharma, A. (2010). Company Law. New Delhi: V.K. Enterprises.