An organizational chart displays the internal structure of a business entity. Each employee’s name is represented within boxes or other shapes, often with a corresponding photo to provide a face with the name.

At the top of most organizational charts are the chief executives, who direct the operations of the company. In some instances, the organizational charts will include members of the Board of Directors and shareholders with significant ownership in the corporation.

The purpose of organizational charts is to create documented illustrations of working relationships, reporting relationships, and corporate hierarchies. Organizational charts instill effective corporate governance throughout the business entity when appropriately developed.

Benefits of organizational charts and corporate hierarchies

Organizational charts provide the structure that allows key business decisions to get done. Corporate hierarchies, established by organizational charts, enable corporate executives to implement the mandates of proper corporate governance.

Corporate governance encompasses all the rules, practices, and processes that help business leaders manage how the entity operates. Organizational charts give key decision makers the authority and influence to enforce corporate governance policies and procedures. Collectively, these documented structures help the business maintain momentum and achieve growth.

What happens without structured organizational charts?

There are significant risks for corporate entities that do not create structured organizational charts. Those risks can be relatively minor, in the form of small fines from government regulators. On the other hand, some business leaders can drive their companies into bankruptcy and subject themselves to criminal indictments.

The most recent example of the latter scenario is the FTX cryptocurrency bankruptcy. Former FTX CEO Sam Bankman-Fried was charged with eight counts of federal crimes in the United States, including conspiracy to commit mail and wire fraud, for misappropriating client funds.

The cryptocurrency exchange filed for Chapter 11 bankruptcy in November 2022. The newly appointed CEO revealed in federal testimony that, under SBF’s leadership, there were no organizational charts at FTX, no corporate governance policies, and a blatant disregard for maintaining compliance with federal laws.

How to create organizational charts with entity management software

One of the chief advantages of entity management software is its intuitiveness. Entity management platforms like MinuteBox were built for non-technical business leaders and legal professionals. The platform relies on no-code document assembly programming to simplify entity management workflows, including the creation of structured organizational charts.

Here’s a basic overview of how to create your own corporate organizational charts using entity management software like MinuteBox.

1. Input the names and titles of your employee registry

Entity management software streamlines most administrative tasks and responsibilities. Data entry specialists, administrative managers, or paralegal professionals are often tasked with data management. The platforms simplify their workflows, translating processes to sort and organize all the data, from hourly commitments down to mere minutes of work.

The one area of this workflow that can’t be simplified is the initial input of corporate data. This is the most time consuming step in the process. However, the platform does include built-in modules that outline exactly where and how to input employee information so that the organizational charts are properly created.

1. Save your work and submit the data into the platform

Complete the insertion of all the names and titles of your employees, executives, board directors, and shareholders. Save your data entries and submit the filings into the platform.

Remember that entity management software is designed to be intuitive. The platform understands the data you’ve inputted, and it intuitively knows how to structure and organize the data into the files you need. The names and titles of your entire corporate registry will automatically be organized into detailed organizational charts.

1. Download your organizational charts into PDF documents

Your organizational charts are automatically generated in a matter of seconds once you submit your data into the platform. Simply select download on the generated file, and you’ll receive structured organizational charts in the form of PDF documents.

If you need to disseminate the files to corporate executives, this is the way to do so. On the other hand, you can keep the organizational charts within your entity management platform and refer to the documents whenever necessary.

Use entity management software to help structure your corporate entity

Entity management software like MinuteBox makes the process of creating organizational charts quick and painless. The documents are produced in record time, and they can serve as one of the foundational pillars of your corporate governance policies.