The Role of Directors and Officers in a Corporation

The role of directors and officers in a corporation depends on the company. A board of directors is a body of elected or appointed members who jointly oversee the activities of a company. The role of directors in a company are outlined in the corporate by-laws, and their main responsibility is to act on behalf of shareholders. Scroll down to learn more about the role of directors in a corporation.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 19, 2021

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Depending on the company, the board of directors and officers can be made up of the same individuals. The board of directors and officers often work closely together, but play very different roles in the corporation.

What is the role of the board of directors and director?

A board of directors is a body of elected or appointed members who jointly oversee the activities of companies. While their duties are outlined in the corporate by-laws, their main responsibility is to act on behalf of shareholders. Typical duties of the board of directors include governing the organization by establishing its mission, policies, and objectives: selecting, appointing, supporting, and reviewing the officers; approving annual budgets; and accounting to the shareholders for the corporation’s performance.

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What do corporate officers do?

The board of directors appoints corporate officers. The corporate officers usually consist of a president, one or more vice presidents, the secretary, and a treasurer. In larger enterprises, there may be hundreds of officers. Officers are responsible for the management and day-to-day operations of the corporation. Each state’s corporation statute will specify the officer positions that must be filled by each corporation. Officer duties vary by position, but the main responsibility is the effective operation of the company.

  • The CEO or president acts under the direction of the board of directors. He or she is responsible for the overall day-to-day activities of the corporation. The CEO typically signs major contracts and approves business arrangements, stock offerings and other legal documents.
  • The chief operating officer oversees operations and reports to the CEO.
  • A chief information officer and a chief technology officer both focus on computer technologies used by the company; although, there are some differences between the roles.
  • The chief marketing officer oversees the company’s marketing initiatives.
  • A chief diversity officer oversees inclusion strategies.
  • The chief design officer oversees the design of the company’s products or services.
  • A chief risk officer handles the risks related to the company.
  • The chief procurement officer is accountable for acquisition programs.

Not all states require a vice president; typically, this is a position to support the president when it is required.

What are the roles of chief financial officer and secretary?

Almost all states require a treasurer or chief financial officer and a secretary. The treasurer handles the corporation’s financial issues, maintaining those records and presenting them to shareholders. The secretary is the keeper of the corporation’s records. The secretary also reports information to oversight agencies and in some cases, to the public.

What are the differences between directors and officers?

While directors and officers have some similar duties, and in some corporations a person can hold both positions, there are two significant characteristics officers have that directors do not. They have the authority to legally bind the corporation. In addition, corporate officers are generally not personally liable for lawful acts taken on behalf of the corporation.

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