Company Management and Administration

Through the process of incorporation companies are set up as separate legal entities from their owners, the shareholders. In large companies the shareholders could be made up of a large number of private investors, pension funds, hedge funds and investment banks. It would not be possible for such a large and diverse group to effectively manage the business. Instead they appoint directors to run the company on their behalf. This is referred to as the separation of ownership and control.

In order to ensure that the company is run in the best interests of the owners, and to ensure that good management practice is applied to such potentially large and complex organisations, there are a number of laws, regulations and principles that recommend and enforce good management practice and company administration. Areas of particular focus include:

• directors responsibilities and duties
• company secretaries
• the requirement for the financial statements to be audited
• company meetings
•  resolutions
• corporate governance
• fraud

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Tags:	separation of ownership and control