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:

a supervisory board, on which representatives of workers and management board are represented;
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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

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