Chair Of The Board - COB

They used to call Frank Sinatra "Chairman of the Board." He probably wouldn't love to learn that they've now shortened it to "chair."

In our times, it's chair of the board, or possibly chairperson of the board.

Every public company (or large private company) has a board of directors. It's a group of people who ultimately represent the interests of the shareholders. The CEO of any company is often seen as the big boss. However, technically, that job falls to the board. In practice, the CEO often has a lot of control on the board. But, at least theoretically, the board hires and fires the CEO and sets overall strategic direction.

The chair is the most important member of the board. He or she runs the meetings and, ultimately, has significant control over the direction of the company. Often times, the CEO also holds the position of chair. Sometimes they're split. But together, the chair and the CEO hold the most power in a company.

Related or Semi-related Video

Finance: What are CEOs, CFOs, and COOs?41 Views

00:00

Finance a la shmoop... what are CEOs, CFOs and COOs lots of C's you know sort of

00:11

like most of our high school report cards but it's a different story [Girl given a school report card with list of C grades]

00:15

all right so the C here for all of these stands for chief not the C in

00:20

big cheese and the O here for all of these stands for officer...

00:28

But sort of in that vein cop ish like when you are one of these

00:33

officers it's your watch your beat your patrol and all that the delimiter here

00:40

is the middle letter so let's start at the top there E the E in CEO stands for

00:47

executive and distinctively the CEO is hired by the board of directors who in

00:53

turn is elected by the common shareholders the CEO is in charge of and [Woman CEO standing in her office]

01:00

well pretty much everything basically executing on the mandate which is to

01:04

make money over the long term for shareholders the CEO deals with both

01:09

internal operational and financial issues as well as dealing directly with

01:14

shareholders externally you know on the outside people ie those Wall Street folk [People working in Wall Street]

01:19

and she is generally you know where the buck stop...okay

01:23

moving on and that'll make some nice venison....Okay the CFO is

01:30

hired by the CEO and while on bad days the F might stand for something else

01:37

on a normal day the F stands for financial, the chief financial officer

01:42

deals with the dollar numbers the bean-counting [CFO counting beans]

01:45

from hiring and paying people usually via the head of human resources hired by

01:50

the CFO to tracking profitability of divisions which the CFO usually does in

01:55

concert with others in the company to you know dealing with Wall Street people [CFO holding a chicken wing]

01:59

as the wing man to the CEO at rubber chicken lunches

02:05

well if the company is

02:07

gonna raise debt to go buy a competitor or sell equity from insiders in a

02:13

secondary offering or use stock to acquire a tools company which will let

02:17

it operate more efficiently well all of that goes through the CFOs highly [A cluttered desk of beans]

02:22

cluttered desk all right so moving on then there's the COO and if you say

02:27

it all together it sounds like a bird but it's not the middle O there stands

02:33

for operating well other than in a company which just does surgery all day [a heart monitor in a surgery room]

02:38

the operating officer doesn't actually do surgery rather she operates the

02:44

company and usually that involves asking a thousand questions hopefully not all

02:49

at once like that Fed Ex guy who had too much caffeine are we getting the best

02:53

prices on the raw plastic we're ordering from war-torn New Zealand, are we making

02:58

enough selfie helmets, and is your dad still disappointed with you for getting

03:03

a C in accounting 101 back in high school

03:05

mm-hmm? just keeping it real there pal... well we can't answer the first two

03:09

and as for the last one well you're a COO oh you can probably afford a nice

03:14

shrink now so go work out your issues [COO laying on sofa talking with psychiatrist]

Find other enlightening terms in Shmoop Finance Genius Bar(f)