two-tier board

(redirected from Two-Tier Boards)

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 ?
We observe that firms in Swiss-French areas and firms in Roman Catholic cantons are more likely to have one-tier boards, whereas two-tier boards are more prevalent in Swiss-German areas and Protestant cantons.
Firstly, in Switzerland, corporations can choose between two forms of board structure: one-tier and two-tier boards.
Banks are obligated to have two-tier boards, and financial firms in general exhibit non-comparable corporate structures (e.
Licht (2001) argues that some factors such as the mandatory two-tier board structure cannot be investigated owing to a limited number of countries where they exist (e.
Swiss law gives all corporate fiduciary duties to one board of directors (one-tier), however, the board is free to delegate (transferable) duties relating to daily business to one or more board members (a delegate or an executive committee) or a separate management team (in the sense of a two-tier board structure).
The effectiveness of corporate governance in one-tier and two-tier board systems: evidence from the UK and Germany.
A comparison between one-tier and two-tier board structures in France.
Mr Higgs did not actually call for two-tier boards.
Whilst not wanting two-tier boards to develop, a workable solution needs to be found that protects non-execs without reducing their accountability.
In real life, the best we can hope from Mr Higgs is any structure that prevents us creeping towards continental-style two-tier boards.