The MBCA and the Delaware corporation statute allow a corporation’s bylaws or board of directors to specify which officers the corporation must have. In many jurisdictions, though, state law requires each corporation to have certain officers, such as a president, secretary, and treasurer. Smaller corporations generally have only a few officers, such as a president who serves as the executive officer and a treasurer who serves as the financial officer. Larger corporations have many more officers and subordinates.
In some instances, a state’s corporation statute may dictate the functions of corporate officers. Some states allow the corporation’s articles of incorporation or bylaws to dictate the officers’ functions. The MBCA provides, “Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of other officers.”
The issue of the authority that is delegated to an officer usually pertains to whether the officer has bound the corporation to another party. If the officer had express authority or implied authority to enter into a transaction on behalf of a corporation, then the officer’s actions could lead to liability on the part of the corporation. Typically, however, an officer of a corporation, even if the officer is the president of the corporation, has less power than the board of directors.