Lesson 2.5: Key Positions in the Corporate Organization Flashcards
they elect the Board of Directors (BOD)
shareholders
each share is equal to
one voting right
responsibility of the BOD
carry out the objectives of the shareholders,
Otherwise, they would not be elected in that position
the highest policy making body in a
corporation
board of directors
board of director’s primary responsibility is the
ensure that the corporation is operating to the serve the best interest of the shareholders
the board of directors set
policies of investments, capital structure, and dividend policies
the board of directors approve
the company’s strategies goals and budgets; the information and other disclosures reported in the financial statements
the board of directors appoint or remove
members from the top management including the president
the board of directors determine
the top management’s compensation
the role of the president in a corporation may
vary from one company to another
the president or CEO approves the
information and other disclosures reported in the financial statements
the president or CEO oversees
the operations of a company, ensuring that the strategies approved by the board are implemented as planned
the president or CEO perform
all areas of management: planning, organizing, staffing, directing, and controlling
the president or CEO represent
the company in professional, social, and civic activities
the vp of marketing formulates
marketing strategies and plans
the vp of marketing directs and coordinates
company sales
the vp of marketing performs
market and competitor analysis
the vp of marketing analyzes and evaluates
the effectiveness and cost of marketing methods applied
the vp of marketing conducts or directs
research that will allow the company to identify new marketing opportunities (e.g. variants of existing product/services already offered in the market)
the vp of marketing promotes
good relationships with customers and distributors
the vp of production ensures
production meets customer demands
the vp of production identifies
production technology/processes that minimizes production cost and make the company cost competitive; adequate and cheap raw material suppliers
the vp of production comes up with
a production plan that minimizes the utilization of the company’s production facilities
the vp of administration coordinates
the functions of administration, finance, and marketing departments
the vp of administration assists
other departments in hiring employees
the vp of administration provides
assistance in payroll preparation, payment of vendors, and collection of receivables
the vp of administration determines
the location and maximum amount of office space needed by the company
the vp of administration identifies
means, processes, or systems that will minimize the operating costs of the company
the role of the vp of finance is
determine the appropriate capital structure of the company
the vp of finance is also known as
financial manager
refers to how
much of your total assets financed by debt and how much is financed by equity.
capital structure
if our assets are bought using cash from the company (from our pockets), it is financed by
equity
if assets are bought using the money from our borrowings, it is financed by
debt
functions of financial mangers
financing decisions, investing decisions, operating decisions, dividend policies
what are financing decisions
decisions as to how to finance long-term investments and working capitalw
what are investing decisions
minimizing the probability of failure by supporting long-term investments with a capital budgeting analysis
what are operating decisions
deals with the daily operations, especially how to finance working capital accounts such as accounts receivable and inventory
a part of profits that are available for
distribution to equity shareholders
dividend
what are a part of dividend policies
financial managers decide whether the firm should distribute all the profits or retain them or distribute a portion and retain the balance
include making decisions as to how to finance long-term
investments and working capital-which deals with the day-to-day operations of the
company.
financing decisions
To minimize the probability of failure, long-term
investments have supported by a capital budgeting analysis.
investing decisions
– deal with the daily operations of the company especially
on how to finance working capital accounts such as accounts receivable and
inventories
operating decisions
Dividend is a part of profits that are available for
distribution, to equity shareholders. The Finance manager must decide whether the
firm should distribute all the profits or retain them or distribute a portion and
retain the balance.
dividend policies
the people that own a company.
shareholders
shareholders are also known as
stockholders or members
They invest their money into the company by buying shares, and have the potential to profit from the company if business goes well
shareholders
responsible for making major corporate decisions, driving the direction of the company, supervising other executives, and overseeing growth plans. They’re accountable to the board of directors or stakeholders of the company and are often the public face of the organization.
ceo or president
the public face of the organizaiton
ceo or president
are financial investments that can easily be converted to cash, typically within five years
short-term investments
short-term investments are also known as
marketable securities or temporary investmentes
short-term investments are sold or converted to cash after a period of only
3-12 months
n account a company plans to keep for at least a year
long-term investments
Long-term investors are generally willing to take
more risks for higher rewards
examples of long-term investments
stocks, bonds, real estate, and cash
The company has a choice on whether to finance
working capital needs by
long-term or short-term sources
dividend policies dictate
the amount of dividends paid out by the company and their frequency to its shareholders
