A corporate management structure is the basis for the chain of command between a company and its employees. The structure can affect the ability of visualizing acquisition processes an organization to implement its business strategy and reach its goals. It can also assist the company in ensuring compliance with regulations pertaining to labor and other laws. Whatever management structure a company employs, all organizations must evaluate and improve their chain of command to ensure that it complies with the legal requirements for the countries they operate in.

Typically, the CEO is the one with the ultimate responsibility for corporate operations and approves contracts and other legally binding actions. The CEO must keep the board of directors apprised of risk, operations and strategic planning.

The board of directors bears the responsibility to set the company’s policy and objectives that must be in line with the interests of shareholders. The board must ensure that the company has sufficient financial resources to meet its goals and make good investments. The board must also be sure that the company is meeting the needs of all stakeholders including those of its local communities and customers.

Corporate boards may be composed of shareholders or senior managers who are inside directors. Inside directors can provide valuable insights into the operations of the company and projects, from an internal perspective. Outside directors can also offer valuable perspectives that can complement the experience and expertise of inside directors.

Larger companies may enact two-tier boards, with a management board in charge of daily activities and a supervisory committee that is accountable for approving budgets and overseeing core corporate initiatives and projects. The two levels allow for the separation of the managerial and executive roles. Limiting the number of directors on the board who have direct management duties within the company could reduce the likelihood of conflict of interests.