two-tier board

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Two-Tier Board

A corporate structure with two boards of directors. A management board oversees the company and provides general direction, while a supervisory board must approve of major business decisions. Half the supervisory board is elected by shareholders while the other half represents employee interests. It appoints the management board. A two-tier board is seen in German companies with the Aktiengesellschaft corporate structure.

two-tier board

a structure of the BOARD OF DIRECTORS of a company used in certain European countries, such as Germany and Norway, that comprises two tiers:
  1. a supervisory board, on which representatives of workers and management board are represented;
  2. a management board that is concerned with the day-to-day running of the business.

The supervisory board is responsible for formulating general policy and the management board with implementing policy. Two-tier boards have gained in popularity in Europe over the past two decades, compared with the UK and US style of unitary boards, and their development has been encouraged by the EUROPEAN UNION. See also WORKER PARTICIPATION.

References in periodicals archive ?
There continues to be, not just from the Higgs Report but from almost all commentators, overwhelming support for the unitary board -to the extent, in my opinion, that the two tier board has not even come 'under starter's orders' in terms of a proper debate.
It seems to me that many of the UK's current corporate governance controversies fall away in the context of a two tier board, without losing the important advantages of the current system -I see no reason why executives should not reap the benefit of wise counsel in other corporate forums.
I am not intending at this stage to discuss how the accountabilities and duties of each tier of the board might fall -I am simply promoting acceptance of the two tier board as a better legal reality.