CEO, CFO, CMO, COO...there’s a real alphabet soup of the titles for the top brass in any medium to large size company. The CEO or Chief Executive Officer generally sets the strategic direction for the company while the Chief Operating Officer (COO) carries out these plans with the day-to-day operation of the business. The purchasing, human resources, manufacturing and distribution departments would all report to the COO, while marketing and sales might report to the Vice President of Sales or the Chief Marketing Officer (CMO). The finance crowd would work for the Chief Financial Officer (CFO).
A COO has a lot of responsibility to make things happen. He or she has to execute the company's business plan (hopefully they have one) and make sure the company goals are reached...like the number of units produced per day, the introduction of new products, inventory maintained at a certain level and the cost per unit of raw materials and finished goods reaching a target price.
A good CEO will choose a COO who perhaps has a skill set that the CEO lacks, so they complement each other on abilities and experience. The COO can be seen as the right-hand man (or woman) and might even be the heir apparent to become the next CEO. Usually the COO has at least 15 years of experience in their chosen field and has worked in a variety of functions within a company. It’s a very busy job with lots of responsibility, so it is not for the faint of heart.
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Finance: How does a board of directors f...27 Views
Finance a la Shmoop! How does a board of directors function?
All right, well structurally, the Board of Directors has really one function, after
it is elected by a vote, of the common shareholders, of the company. The board of
recruits, then hires the CEO and that's not necessarily easy. Because, most
of the good CEOs, you actually want, are already ensconced in high-paying jobs, [man being offered money]
from which they have to be bought away. Picking the right CEO, is the big
roulette wheel bet, the board makes. Is the CEO good, or bad, or ugly and yeah the
CEO can be all three. After being hired the CEO then hires everyone else, more or
less. In a public company, the board divides into committees, to advise and
oversee many of the little processes. There's audit committee people and
nomination and government committee people and Compensation Committee people.
In large companies there are also, often subcommittees, that focus on narrow
things, like technology, or politics and lobbying and, or the environment. You know, if [oil drill with man and duck]
you work for a big polluter. Well another big element of board value-add, revolves
around, strategy. Are we the high cost, high value company, or are we the low cost,
Walmart desk provider? That is, are we Pirates of the Caribbean, or are we La La
Land? What other strategic issues are we fighting? How do we get into China and [world map]
Russia and get out of Somalia? So yeah, that's strategy. How does the
board cover its primary obligations, in providing a fiduciary duty, to the
shareholders, who elected them? Is the board governing fairly and equitably?
Yeah, how do they do that? Well they just basically pay attention, right? Are
company policies racist, or gender biased, or ageist?
Which is illegal everywhere, except Silicon Valley in Hollywood. Are all the [director and actress]
right controls inspected, like audit, hiring, firing, policies and our
companies casual Fridays, have they gotten to just to casual? Is that a board item?
Yah, alright, next meeting. So yeah, that's the gist, hire the CEO, form
committees and of course they're also in charge of bagel Thursdays. [man in panda suit, bagels falling from sky]
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