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A corporate title is a designation that indicates where an employee fits in the company hierarchy. It defines the scope of the employee's duties and responsibilities as well as denotes the chain of command. There is a standard methodology for the use of corporate titles that is generally recognized, but within the common format there is a lot of variation. Corporations have the authority to use or create any title system that reflects the company's culture and its decisions about organizational structure.
The way a corporation uses titles reflects its organizational structure and chain of command. Titles also indicate functional areas of responsibility for the employee as well as the company. A corporate title comes with an industry expectation of included duties and responsibilities that drives job descriptions and hiring. An employee who holds one title would have grounds to object if his functional duties fell outside of his job description or the scope of the title's standard definition. In this way, titles exist to protect employees while enabling a corporation to define its managerial and operational structure.
As a result, the type of titling system a corporation will use is one of the first decisions it makes upon start-up. A new corporation must first decide how to designate senior executives, which is usually a reflection of the common practices in the country where the corporation is headquartered. In the US, for example, corporations typically choose one of two standard methodologies. The “chief” titles result in an executive triangle with the chief executive officer (CEO) at the top and a chief operating officer (COO) and chief financial officer (CFO) reporting directly to him. Alternatively, the corporation can designate a president at the top, with an executive vice president of operations and an executive vice president of finance reporting to him.
Many large corporations in the US combine the two types of titles so that their executives have a title that is translatable and comparable regardless of the environment in which they are operating. The president would also hold the title of CEO, reflecting the fact that he runs the company and is also the chief executive of the board of directors. CFOs and COOs would also hold executive vice president titles so they fit within the company organizational structure under either corporate title.
After designating the titling system for senior executives, a corporation can fill out its organizational chart with standard or original titles that reflect the company's way of operating. A corporate title can be added at any level below the top executive. Additional chief titles can be added, such as chief risk officer or chief marketing officer. Under the executive vice presidents can be a vice president of marketing or communications. Manager, director, and supervisor are other titles that can fill out the management levels below the top executives.