How I Would Structure a Public Company

Prior to the 20th century, companies were generally family owned and run; they were small and easy to direct. The evolution of public ownership changed all of that. It created a separation between ownership and leadership. In an attempt to ensure that public companies are driven by shareholder interest, a two-tier hierarchy was developed.

The first tier is the Board of Directors. The board is composed of two types of members: Internal Directors – from within the company – and External Directors – independent from the company. All members of the board are elected by the shareholders, including the Board Chair.

The second tier is the Leadership Team. Leadership is hired or approved by the board of directors to guide the daily operation of the company. The typical leadership team looks like this:

Screen Shot 2017-08-06 at 9.50.59 AM

I have a few issues with this structure:

  1. Why have “Chief Officers” if there are no “Officers”?;
  2. Why have “Vice Presidents” if there are no “Presidents”?; and
  3. The title of “Manager” has a negative connotation

I would execute this structure:

Screen Shot 2017-08-06 at 9.59.44 AMThe word “officer” is derived from the Latin word “officium” meaning “service”.  That’s a beautiful definition of what a “manager” should be – of service to their company and their employees. Anyone in a leadership position should be called an officer. As one rises through the ranks of a company, they take on greater responsibility and their title becomes more general. For example, the technical branch of a company could look like this:

Screen Shot 2017-08-06 at 10.30.54 AM