According to law, public companies in the U.S. must have a board of directors that protects the interests of the shareholders in an organization. Each member of the board of directors is an elected body through a formal board nomination process.
A board of directors is a governing body that is considered the company's top level of authority. Other than protecting shareholder interests, the board establishes policies for management and makes important decisions about the company or corporation.
Anyone can nominate a member for the role of the vice president, including the board’s president. The president will, however, preside over any meeting in which a vice president is elected, as well as when a secretary or treasurer is elected.
The vice president is the operating officer of the corporation and is usually the second or third person in the top-level management hierarchy. The core responsibility of a vice president is to perform the duties and functions assigned by the president of the board. They also assist the president and the board of directors in designing the corporation's mission, strategic goals, and values.
If the president cannot perform their duties, the vice president steps in as the president. The vice president serves as the chairperson of at least one operational committee. An organization can have more than one vice president, depending on its size and structure.
The vice president reports to the president, and the president usually reports to the CEO. However, in some organizations, the CEOs are the owners of the company and also the presidents of the corporation, even though this structure is not generally recommended.
To play the role of vice president effectively, candidates must have certain managerial skills and experience. The vice president's job requires excellent communication and listening skills, along with public speaking and presentation abilities.
The vice president leads and motivates people to achieve company goals. To do so, this individual needs solid leadership, critical thinking, and problem-solving skills to handle any rising challenges within an organization.
When it comes to the election of vice presidents, different organizations follow different processes or procedures in accordance with their bylaws. Because there are no laws that specify the method to use for electing officers, every board must have its own policy about organizational meetings and their frequency.
When board members are elected, they nominate a member from the board to be their president. The newly elected president will preside over the meeting to select a vice president among the nominated candidates.
The structure of a board of directors and the responsibilities and powers assigned to each member are defined in the bylaws of a corporation. The bylaws dictate how many board members the board will have, the election process, and the frequency of the board meetings.
The structure of and number of members on a board of directors vary depending on the size of the company, the industry the corporation is operating in, and shareholder preferences. A board of directors exists to represent and protect the interests of shareholders; it is encouraged to include both external and internal members. Internal members share the inner perspective of the organization, as they are aware of the corporation's daily operations, while external members represent the perspective of people working outside of the organization.
Usually, an independent auditor shares its findings with the board of directors. The organization's chief executive officer (CEO) reports to the board of directors. The chief operating officer, chief financial officer, chief marketing officer, and other high-level executives report to the CEO.
The following five positions are common on a board of directors:
The vice president is one of the top-level managerial positions in a corporation. Anyone can nominate a member for the role of vice president, and electing the right vice president is important in a company as they are responsible for assisting in the crucial decisions of the organization.
Curious about whether a board member can be an employee or if a board member can withdraw a nomination for a position? Take a look at our latest posts.
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