Corporate Structure
All publicly traded companies have the same basic corporate structure. Let's look at Ed's Carpets. Ed's name is on the building, but his company is owned by shareholders. ED holds stock in the company, so he is one of the shareholders. If all the shareholders try to manage the company, nothing gets done. Instead, they hire a management team to run the company for them. This team includes a chief executive officer (CEO), a chief operation officer (COO) and a chief finance officer (CFO). Other than these three, there are managers and employees to make sure the carpets are being made and delivered everyday. The management team can't report to every shareholder, so a company's board of directors is created. Directors are elected to the board by the shareholders. A board is usually made up of a mix of shareholders and management. The board helps to direct company's management and protect shareholders' investment in the company.


