CORPORATE GOVERNANCE

TYPES OF COMPANIES AND CORPORATE POSITIONS

TYPES OF COMPANIES Legal Forms of Companies Public Limited Company (PLC) Limited Liability Company (LLC) General Partnership Limited Partnership and Sole Trader Co-operative and Limited Liability Partnership CORPORATE POSITIONS General Discussion Top Corporate Positions Ideal Corporate Hierarchy Supervisory Board vs Executive Board US Corporate Model Corporate Titles

4. LEGAL FORMS OF COMPANIES

The legal forms of companies, such as the corporations are: Public limited liability company (PLC) Limited liability company (LLC) General partnership Limited partnership Sole trader Co-operative Limited Liability Partnership

5. PUBLIC LIMITED COMPANY (PLC)

The shares are traded publicly The liabilities for legal actions and the debt the company

may face are of the companies and not of the shareholders The CEO is elected by a Board of Directors The BOD is elected by the shareholders after certain predetermined interval Special or extra share holder meetings are called in case of special situation when the shareholders deem it necessary Usually listed in one or many Stock exchanges Rules of stock exchanges define some minimums to capital, cash flow and market value for PLCs to be viable for trading

6. LIMITED LIABILITY COMPANY (LLC)

Known as Ltd. in UK and Inc. in US The shares are not traded publicly The owners are usually not liable for legal actions

and debts the company may face Managed by a CEO in US and by Managing Director in UK Both are elected by a Board of Directors The BOD is elected by the share holders in scheduled meetings. Extra share holder meetings can usually be called up if enough share holders deem it necessary for some reason

7. GENERAL PARTNERSHIP-1
Formed by two or more persons The owners are all liable for legal actions and debts the

company may face personally Created by agreement, proof of existence, etc. In General: A form of business entity in which 2 or more co-owners engage in business for profit. For the most part, the partners own the business assets together and are personally liable for business debts. Sharing Profits: In the absence of a partnership agreement, profits are shared equally amongst the partners. A partnership agreement, however, will usually provide for the manner in which profits and losses are to be shared.

8. GENERAL PARTNERSHIP-2
Unlimited Personal Liability for Losses: Each

Partner is, jointly and severally, personally liable for debts and taxes of the partnership. For example, if the partnership assets are insufficient to satisfy a creditor's claims, the partners' personal assets are subject to attachment and liquidation to pay the business debts. Liability for a partner's debts: Each general partner is deemed the agent of the partnership. Therefore, if that partner was apparently carrying on partnership business, all general partners can he held liable for his dealings with third persons.

9. GENERAL PARTNERSHIP-3
Each partner may be held jointly liable for a co-partner's

wrongdoing Technically, a partnership terminates upon the death, disability, or withdrawal of any one partner. Generally, in such case the shares of the departed partner (s) are purchased by the remaining partners In the absence of a partnership agreement, each general partner has an equal right to participate in the management and control of the business. Ordinary disagreements are decided by a majority of the partners. Extraordinary disagreements and amendments to the partnership agreement require the consent of all partners Unless otherwise provided in the agreement, no one can become a member of the partnership without the consent of all partners. However, a partner may assign his share of the profits and losses and right to receive distributions ("transferable interest").

10. LIMITED PARTNERSHIP AND SOLE TRADER

LIMITED PARTNERSHIP Like a General Partnership except for the fact that there is/are so called silent partners who just invest capital into the business without any liability the company may face. SOLE TRADER Run by a single person who provides entire capital. He makes all the decisions He is personally liable for legal actions and debts. The profit he makes belongs to him

11. CO-OPERATIVE AND LIMITED LIABILITY PARTNERSHIP

CO-OPERATIVE A legal entity owned and democratically controlled by its members. Members often have a close association with the enterprise as producers or consumers of its products or services, or as its employees. There are two kinds of Co-operatives:
Owned collectively by the customers Owned and managed collectively by the workforce

LIMITED LIABILITY PARTNERSHIP A business structure under which one partner might not be

personally liable for the actions of another partner. It offers considerably more protection for partners compared to a traditional partnership. The limited liability in some ways makes an LLP something of a hybrid between a corporation and a traditional partnership.

13. GENERAL DISCUSSION

The activities of large corporate entities are performed by

a large number of workers placed at different levels Successful functioning of the corporations depends on the collective effort of the people engaged at different corporate strata Corporate positions are named differently, known as corporate titles or business titles that act as a means of identifying and distinguishing those positions functions The functions ideally should be different. However, experience show many overlaps that often create management difficulties An ideal organization makes functions and titles very specific to avoid internal and external confusions.

14. TOP CORPORATE POSITIONS-1

The C-level positions are the top most level executive

positions. These refer to 3-letter initials starting with "C" and ending with "O: "Chief . Officer The traditional offices are:
Chief Executive Officer (CEO)

Chief Operations Officer (COO), and

Chief Financial Officer (CFO).

In

banking, insurance, and other financial services companies positions, such as Chief Administrative Officer and Chief Risk Officer positions are found.

15. TOP CORPORATE POSITIONS-2

Technology companies (telecom, IT sector companies,

etc.) may have:

Chief Technology Officer (CTO) and Chief Information Officer (CIO)

In creative/design companies (such as film studios,

comics companies or a web design companies), there is sometimes a Chief Creative Officer (CCO), responsible for keeping the overall look and feel of different products.

16. IDEAL TOP CORPORATE HIERARCHY-1

Duties and responsibilities vary in accordance with the

positions and the titles in the corporate system Some companies designate Chairman and CEO as the top executive, while the number two is the President Other companies have a President and CEO without official deputy Typically, C-level managers are "higher" than Vice Presidents, although many times a C-level officer may also hold a vice president title, such as Executive Vice President and CFO. The board of directors is technically not part of management itself, although its chairman may be considered part of the corporate office if he or she is an executive chairman.

17. IDEAL TOP CORPORATE HIERACHY-2

A corporation often consists of different businesses, whose senior executives report directly to the CEO. If organized as a division then the top manager is often known as an Executive Vice President
If that business is a subsidiary with considerably more independence then the title might be known as Chairman and CEO.

18. SUPERVISORY BOARD VS EXECUTIVE BOARD

In some EU in some Asian countries, there are two separate

boards:
Executive Board for the day-to-day business and Supervisory

Board for control purposes (elected by the shareholders).

In these countries, the CEO presides over the executive board

and the chairman presides over the supervisory board, and these two roles will always be held by different people. This ensures a distinction between management by the executive board and governance by the supervisory board. Above is similar to the government structure that makes distinctions between the political cabinet and the civil service.

19. US CORPORATE MODEL

In the United States, the Board of Directors is

elected by the shareholders and is often equivalent to the Supervisory Board in EU countries The Executive Board is generally known as the Executive Committee or Executive Council in US, composed of the division/subsidiary heads and Clevel officers report directly to the CEO, who performs dual function: both as head of the BOD and The EB/EC.

20. CORPORATE TITLES-1

Chairman of the Board: Presiding officer of the corporate board of

directors. Chief Architecture Officer (CAO): A relatively new executive-level position at a corporation, company, organization, or agency, typically reporting directly to the CEO or board of directors. The CAO is responsible for the architecture of the whole enterprise. Chief Academic Officer (CAO): In some academic institutions the CAO is in charge of all Academic aspects of the learning institution. Chief Accounting Officer (CAO) Chief Accounting Officer (CAO) Chief Analytics Officer (CAO): High-level corporate manager with overall responsibility for the analysis and interpretation of data relevant to a company's activities; generally reports to the CEO. Chief Audit Executive (CAE): High-level 'independent' corporate executive with overall responsibility for the internal audit

21. CORPORATE TITLES-2

Chief Business Officer (CBO)
Chief Business Development Officer (CBDO). Chief Brand Officer (CBO): A relatively new executive-

level position at a corporation, company, organization, or agency, typically reporting directly to the CEO or board of directors. The CBO is responsible for a brands image, experience, and promise, and propagating it throughout all aspects of the company. The brand officer oversees marketing, advertising, design, public relations and customer service departments.

22. CORPORATE TITLES-3

Chief Commercial Officer (CCO): The executive

responsible for commercial strategy and development Chief Communications Officer (CCO) Chief Compliance Officer (CCO): In charge of regulatory compliance, especially Sarbanes-Oxley Chief Content Officer (CCO): The executive responsible for developing and commissioning content (media) for broadcasting channels Chief Creative Officer (CCO) Chief Credit Officer (CCO)

23. CORPORATE TITLES-4

Chief Customer Officer (CCO): Responsible in

customer-centric companies for the total relationship with an organizations customers. Chief Data Officer (CDO) Chief Debriefing Officer (CDO): Responsible for getting the status, and maintaining forward motion in production Chief Design Officer (CDO) Chief Diversity Officer (CDO) Chief Electrification Officer (CEO): Responsible for electrical generating and distribution systems

24. CORPORATE TITLES- 5

Chief Engineering Officer: Responsible for technology/product R & D and/or manufacturing issues in a technology company. This position is generally separate from any internal IT functions. This title occurs more in those technology companies that make products other than software, but increasingly CTO is used instead now in both software and non-software industries alike to refer to overseeing the development of technology being commercialized.

25. CORPORATE TITLES- 6

Chief Executive Officer (CEO)/Executive Director for the nonprofit sector (US), Chief Executive/Managing Director (UK) and some other English speaking countries). Highest ranking management officer of a corporation Has final decisions over human, financial, environmental and technical operations of the corporation. The CEO is also a visionary, often leaving day-to-day operations to the President, COO or division heads. Other corporate officers such as the COO, CFO, CIO, and division heads report to the CEO. Often the Chairman of the Board. Many public companies have been separating the roles of Chairman and CEO to improve corporate governance. President and CEO is a popular combination if there is a separate chairman.

27. CORPORATE TITLES- 7

Chief Executive Manager CEM

(US): It is the highest ranking management person. His role is comparable to the role of CEO within CG. Chief Financial Officer CFO: High-level corporate officer with oversight of corporate finances; reports to the CEO. Chief Human Resources Officer (CHRO) Chief Information Officer (CIO): High-level corporate manager with overall responsibility for the company's information resources and processing environment; generally reports to the CEO or COO.

28. CORPORATE TITLES- 8

Chief Intellectual Property Officer (CIPO): Responsible for the

management of the IP assets and potential IP-related liabilities of the enterprise Chief International Officer (CIO): Responsible for development and implementation of overseas markets Chief Investment Officer (CIO): High-level corporate officer responsible for the assets of an investment vehicle or investment management company and/or responsible for the asset-liability management (ALM). Reports to the CEO or CFO. Chief Knowledge Officer (CKO): Responsible for managing intellectual capital and the custodian of Knowledge Management practices, usually in a legal organization Chief Legal Officer (CLO)/General Counsel/GC Chief Learning Officer (CLO): Responsible for all Learning/Training Operations Chief Marketing Officer (CMO)

29. CORPORATE TITLES- 9

Chief Medical Officer (CMO): Responsible for scientific and medical excellence of the company's research, development and products
Chief Operating Officer (COO)/ Director of Operations for the nonprofit sector: High-level corporate officer with responsibility for the daily operation of the company; reports to the CEO. The COO often also carries the title of President, especially if the number one is the Chairman and CEO.

30. CORPORATE TITLES- 10

Chief Press Officer (CPO) Chief Procurement Officer (CPO) Chief Product Officer (CPO): Responsible for all product-related matters. In small and mid-sized companies it can also play the role of the COO. Chief Program Officer (CPO): High-level corporate officer with responsibility for the daily operations of an organization's programs. Reports to the CEO. Chief Quality Officer (CQO): Responsible for setting up quality goals. Chief Relations Officer (CRO): Officer responsible for key external relationships including Investor Relations, Government Relations and sometimes Public Relations or Communications. Chief Research Officer (CRO): Responsible for Research Chief Revenue Officer (CRO): Responsible for all revenue within the organization Chief Risk Management Officer (CRO): Common in financial institutions. Chief Sales Officer (CSO): Responsible for all sales/revenue within the organization Chief Science Officer (CSO): Responsible for research, development and new technologies. Chief Security Officer (CSO) Chief Strategic Planning Officer (CSO)/(CSPO) Chief Supply Chain Officer (CSCCO): Responsible for the supply chain management of the company.

31. CORPORATE TITLES- 11

Chief Tax Officer (CTO): Responsible for the tax function The

CTO may report to the CEO, CFO, general counsel or the internal audit function. Chief Technology Officer (CTO)/Chief Technical Officer): Responsible for the company's technology. Chief visionary officer Chief Web Officer Financial Control Officer, FCO or FC, also Comptroller or Controller : Supervises accounting and financial reporting within an organization Director or Member of the Board of Directors: High-level official with a responsibility of overseeing the operation of a corporation and elects or removes officers of a corporation.

32. CORPORATE TITLES- 12

Director: A manager of managers within an organization who is often

responsible for a major business function and who sometimes reports to a Vice President. Often used with name of a functional area; Finance Director, Director of Finance, Marketing Director, and so on. Not to be confused with a Member of the Board of Directors who is also referred to as a Director. Alternatively, a manager of managers is often referred to as a "senior manager' or as an "associate vice president", depending upon levels of management, and industry type. Fellow: Often a very senior technical position and is equal to a director or VP President: Legally recognized highest "titled" corporate officer, and usually a member of the Board of Directors. There is much variation; often the CEO also holds the title of President, while in other organizations if there is a separate CEO, the President is then second highest-ranking position.

33. CORPORATE TITLES- 13

Secretary or Company Secretary: Reports to the Board of Directors and is responsible for keeping the records of the Board and the company. Secretary-Treasurer: In many cases, the offices of Secretary and Treasurer are held by the same person. In this case, the position is commonly referred to by the combined title Secretary-Treasurer Treasurer: Legally recognized corporate officer entrusted with the responsibility of caring for company funds Associate: Often used to indicate a customer service position or temporary/part-time worker. Supervisor Foreman General Manager or GM Manager Counsel: A lawyer working on a part-time or temporary basis for a company

or law firm. Owner/Proprietor or Sole Proprietor Partner: Used in many different ways. This may indicate a co-owner as in a legal partnership or may be used in a general way to refer to a broad class of employees or temporary/contract workers who are often assigned field or customer

34. CORPORATE TITLES- 14

Principal: May refer to an owner of the business or a

high-level technical worker such as Principal Engineer or Principal Scientist. Vice Chairman: Officer of the Board of Directors who may stand in for the Chairman in his/her absence. However, this type of Vice Chairman title on its own usually has only an advisory role and not an operational one. Vice President: Middle or upper manager in a corporation. They often appear in various hierarchical layers such as Executive Vice President, Senior Vice President, Associate Vice President, or Assistant Vice President, with EVP usually considered the highest and usually reporting to the CEO or President.