Florida corporations have two levels of authority at the top of the hierarchy: the Board of Directors and Corporate Officers. Within the company, an elected Board of Directors hires and supervises all Officers, and all Officers are employees of the company who report to the Board. While both Directors and Officers serve important roles to oversee company operations, these roles have distinct differences.
Every member of the Board of Directors is elected by the company’s shareholders. Each member of the Board is considered to be a Director. These elected officials oversee company operations, making sure that the company serves shareholders’ interests. They have the overall responsibility for the corporation, and are charged with the duty of running the company in a legal and ethical manner. The Board is required to hold meetings at least annually, although most Boards meet more frequently than that, usually monthly or quarterly.
During the process of founding a business, the Board is initially responsible for adopting bylaws, hiring Officers, and authorizing initial agreements. On an ongoing basis, the Directors’ responsibilities include amending the bylaws or Articles of Incorporation as necessary, entering into leases and major contracts, hiring key employees, buying or selling substantial assets, borrowing significant sums of money, calling shareholders’ meetings, and adopting company policies. In general, the Board of Directors is responsible for making major decisions, while less significant decisions are left up to the Corporate Officers and other employees.
Corporate Officers are hired employees, rather than elected officials. Hired by the Board, they report to and are responsible to the Board, and ultimately to shareholders. As an employee of the company, they may be fired or replaced if the Board of Directors feels that they are not serving shareholders’ interests.
Corporate Officers form the executive management team running the day-to-day operations of Florida corporations. They make business decisions, enact corporate strategies determined by the board, and are responsible for hiring employees.
Examples of corporate officers include the Chief Operating Officer (COO), Chief Executive Officer (CEO) or President, Vice President, Secretary, and Chief Financial Officer (CFO). Some of the executive officers, such as the President, may also serve on the Board as a Director. An officer who is also a Board member is known as an inside director, and has all of the rights and responsibilities of a Director. However, corporate officers who are not members of the Board cannot vote on Board motions.