Learn how they function and the different types of corporate board officers, from treasurer to secretary and beyond, to better understand the management structure of a typical corporation.
What Are Corporate Board Officers?
Corporate board officers are agents of the board of directors of a corporation. That is, they’re elected by the board of directors to execute the decisions of the board. These individuals are generally responsible for the day-to-day operation of the corporation.
How Corporate Board Officers Work
The management of a corporation typically comprises three categories of stakeholders: shareholders, directors, and officers. Shareholders are company owners who have traded assets for shares of stock in the corporation. These shareholders appoint directors who manage the corporation. Directors, or members of the board of directors, elect corporate board officers who manage the daily activities of the corporation. Even though a corporation is managed by its directors, and directors have the authority to make decisions for the corporation, corporate board officers make many decisions on behalf of the directors. An officer’s responsibilities might encompass executing on the mission and vision of the company, enacting policies, or taking on fiduciary responsibility for the financial well-being of the corporation, for example. However, directors make some major decisions themselves, such as setting corporate policies for prices, wages, and labor relations, as well as policies for executive compensation, pension, and other retirement plans. The bylaws of a corporation establish the number of officers and the duties of each, which may be prescribed specifically by the directors if the bylaws permit it. However, several corporate board officers are generally permitted.
Types of Corporate Board Officers
There are four major officer roles: the president, vice president, treasurer, and secretary of the board.
President or Chair of the Board
The president or board chairperson is responsible for the overall policy and operations of the board of directors and ensures that all appropriate actions are taken. Specifically, this individual may:
Ensure that an agenda is planned for each board meeting Preside over meetings of the board of directors and the annual meeting Sign specific documents on behalf of the board of directors and the corporation, such as checks or contracts Serve as supervisor/liaison with corporate executives reporting to the board Serve as primary spokesperson for the organization
Vice President or Vice-Chair of the Board
The vice president or vice-chair may have no specific duties but should be able to fill the duties of the president when the president is absent. Often, the vice president has other regular duties, as determined by the board in its corporate bylaws or on an ad-hoc basis. They may, for example:
Ensure that meetings and other activities run smoothlyChair ad-hoc committees
Corporate Board Treasurer
The treasurer of the board of directors has primary responsibility for the financial well-being of the corporation but does not take day-to-day responsibility. Included in the board treasurer’s responsibilities are the duties to:
Create, implement, and review financial policies for the corporationReview the cash flow and investment activities of the corporation to ensure they’re properly managedEnsure that sufficient taxes are paidCreate and maintain the corporation’s annual budget for each fiscal (financial) yearOversee the annual financial audit of the corporation (if public) and other audits of corporate records and finances.Chair the board’s finance committee.
Corporate Board Secretary
The secretary of the board of directors has the overall responsibility to create and maintain corporate records and other important corporate documents. They may have the responsibility to:
Record minutes of all board meetings and minutes of all committees as needed. Keep records of all policies approved by the board. Maintain a calendar of corporate events, such as the date of the annual meeting and budget approval dates. Maintain records of shareholders and the stock record book Keep all records in a safe place and make sure all documents are in good order in case of audits Maintain the corporate seal, if one exists
Requirements for Corporate Board Officers
Officers must at all times act in the best interests of the corporation and carry out their duties with prudence, honesty, good faith, and fairness. If they adhere to these standards, they can generally expect not to be held liable for actions they take as an officer or the failure to take action. That said, officers may be liable for non-compliance with anti-fraud and disclosure requirements under federal securities laws, namely the Securities Act of 1933 and the Securities Exchange Act of 1934. If corporate board officers are sued during the course of their employment, so-called “indemnification” provisions established by state law or a corporation’s articles of incorporation or bylaws may serve as financial protection for officers against expenses and liabilities for lawsuits.
