From an outsider’s perspective, corporations can seem like confusing entities with complicated organizational structures. From shareholders and directors to officers and regular employees, it can be difficult to understand where each role fits and who controls which actions.
One role in particular, the corporate officer, is fundamental to ensuring business runs smoothly. In this post, discover what an officer is and how their role differs from other roles within a corporation.
What is a Corporate Officer?
A corporation is made up of shareholders, directors, and officers. While shareholders fund the corporation and directors make high-level decisions, officers make sure the corporation stays in operation by handling routine business.
In other words, they carry the responsibility of managing day-to-day business for the corporation. This can include maintaining records, hiring and firing, managing finances, delegating tasks, and more. In many cases, corporate officers are the people who hold high-ranking positions within a corporation.
The Types of Corporate Officers
There are a variety of corporate officers, depending on the industry of the corporation, but it is fairly common for corporations to select someone to be the:
- Chief executive officer (CEO): Also known as the company president, a CEO is typically the highest-ranking employee in a corporation. Traditionally, CEOs lead the other officers and make many of the major final decisions that are required for day-to-day operations.
- Chief financial officer (CFO): Also known as the company treasurer, a CFO coordinates the company’s finances, including doing financial risk management and reporting profits and losses.
- Chief operating officer (COO): Also known as the chief operations officer or chief administrative officer (CAO), a COO is responsible for assisting the CEO with the day-to-day management of the corporation.
Other common officer roles include:
- Chief communications officer (CCO): Sometimes called a public relations officer (PRO), this person handles internal and external company communication, including creating company-wide strategic communication plans.
- Chief information officer (CIO): This person is responsible for managing information and technology within the corporation.
- Chief technology officer (CTO): A relatively new role that is similar to a CIO’s role, this person’s job typically involves developing policies and procedures for the company with respect to new technology or engineering.
- Chief personnel officer (CPO): Sometimes called the chief human resources officer (CHRO), this person looks after the needs of the company’s employees, including handling organizational policy and procedure, ensuring the company complies with labor laws, and more.
Some companies may combine officer roles, such as a COO and a CFO being combined to create a CFOO or chief financial and operating officer. Likewise, other companies may decide to integrate industry-specific officers, like a chief gaming officer (CGO), a common position for computer or video game companies.
The type of officers a corporation appoints can differ depending on how the owners want to organize their corporation, the industry the corporation is in, and more. During the corporation’s annual director’s meeting, directors can modify officer positions to fit the company’s needs using a Director’s Resolution, which means officer roles can grow with the corporation.
Appointing Officers for Your Corporation
While shareholders and directors make large-scale, fundamental decisions for the company, officers focus on daily needs and ensure business runs as expected by overseeing specific areas or departments.
Although corporations can be confusing entities at times, understanding organizational structures can help demystify the concept.