Clear choice of roles for management personnel is crucial to business development. The shareholders, Board of Directors and Managing Director each have their own area of responsibility within the company. If you play your role responsibly, you will create a sound basis for your company’s success. You can also promote your company’s development through good human resources management and supervision.
A shareholder generally allows the company to operate by providing it with the financing it needs. Shareholders have the right to aim for a maximum return on their investments. They cannot protect their interests through agreements but through oversight.
Shareholders appoint members to the limited liability company’s Board. They are in the role of employer and decision-maker. However, they are not usually involved in the management of the company.
The decisions that shareholders take contribute to the company’s success, the atmosphere at work and the general role of management. A good shareholder appreciates the value of interactive decision-making. He or she will also promote trust between stakeholders and try and achieve long-term benefits for the company.
The smaller the company, the greater the role of the owner normally is. In a limited partnership, the general partner often makes all the decisions him/herself, without holding meetings. The general partner is also responsible for the company to the extent of all his/her assets. In a large limited liability company, however, the shareholders are only liable to the extent of the capital they have invested. There may be a number of shareholders, in which case major decisions are taken at the annual general meeting.
Under the Limited Liability Companies Act, a company must have a Board of Directors consisting of between one and five members. If there are fewer than three members, the Board must have at least one deputy member. If there is more than one member, the Board must have a chairperson. The members may be from within the company or from outside it.
The Board’s main function is to ensure that the company has the best possible management. The Board also contributes to the company’s development on a day-to-day basis. It acts as a strategist, a risk management expert and the Managing Director’s main partner.
The Board’s responsibilities include:
- attending to the administration and operations of the company
- issuing instructions, for example to the Managing Director
- representing the company externally
- implementing the decisions of the annual general meeting and overseeing compliance with them.
The work of the Board is guided by the Limited Liability Companies Act and overseen by the annual general meeting, which may discharge Board members from liability. If a Board member has intentionally, or through negligence, caused the company loss or damage, he or she will have to provide compensation.
A normal employment contract is not signed between the Managing Director and the company, but usually a Managing director agreement is made. Appointing a Managing Director for the company is voluntary.
It is the task of the Managing Director to manage the day-to-day business of the company in accordance with the Board’s instructions and rules. The Managing Director must ensure that the company’s operations and accounts accord with the existing laws and regulations. He or she should also ensure that the company’s financial affairs have been reliably attended to.
The Managing Director’s functions also extend to ensuring that the company adheres to its strategy in a practical way. The Managing Director consciously or unconsciously shapes the company culture. He/she also tries to broaden the company’s networks and establish partnerships with other actors. The Managing Director manages the company’s overall development through grassroots leadership.
Your company’s development and its ability to achieve its objectives requires excellent management of people - both personnel and oneself. As a good manager, you ensure that your company has the right resources in place to function successfully and you take responsibility for its business and people. You also have excellent human relations skills and know how to take decisions.
Your main goal should be to make your company strategy comprehensible. All personnel must know what is expected of them. Remember also the importance of dialogue and feedback. Good leadership and the well-being among staff will also usually result in a good and productive atmosphere in the workplace. Of course, the staff are also responsible for the atmosphere on their behalf.
You can become a good manager by means of practical supervision and through training. In the role of supervisor you develop as someone who listens, shares information, provides encouragement, gives feedback and builds trust. As a good supervisor, you are unbiased and know what you are supposed to achieve. You are also able to predict problems and face them head-on.
Different training and consulting services are available for the development of business management. For example, the ELY Centres provide training programmes for the management and key persons of small and medium-sized enterprises. They provide training in growth management, management of finances and productivity, and management of marketing and customer relationships.
The senior management of your company can also improve their own management skills by completing a Specialist Vocational Qualification in Leadership and Business Management. Read about the training opportunities targeted at entrepreneurs and persons in managerial positions on the page Entrepreneur and training.