3.4.11 Formal documentation of roles

Decisions are taken by the full board.1 The authority of the officers consists of the power to represent and run the company in the ordinary course of its operations. They enjoy an explicit or implicit agency. US principle is that there should be flexibility. Every company can have a different structure and division of roles. Companies are sometimes inventive in creating new types of functions and systems, such as the lead director and the apprentice system. The apprentice system involves a retired CEO assisting and coaching his successor for about 6 months. This flexibility means that it is a responsibility of the board to describe precisely how the roles are divided.2

Explicit authority may be found in bye-laws, corporate resolutions made by the board or properly approved and detailed employment contracts.3 US practice is to be clear about who may do what. Decisions of the board are taken by the full board and powers of attorney are given to one or more officers to execute the action. If there is a non-CEO chairman or lead director, their respective functions should be clearly deflned.4