two-tier board

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
Worker board representation operates successfully in countries such as Sweden, Norway and Ireland, who have a unitary board structure, as we do in the UK, as well as in countries that have a two-tier board structure, such as Germany and Austria.
Ahold Delhaize will be based in the Netherlands and governed by a two-tier board comprising a supervisory board (seven members from each company) and a management board.
"In its governance mode the BBC operates a two-tier board structure which leads to confused responsibilities.
In 2002, the statutory creation of a modified two-tier board
(8) In contrast, in Germany (and Austria), supervisory and executive tasks are separated by law and are allocated, respectively, to a supervisory board and a management board, which establishes a clear division of responsibilities (two-tier board structure).
Under Germany's two-tier board structure for listed companies, senior managers including the chief executive are appointed by the non-executive supervisory board.
This system generally uses a two-tier board structure, dividing board functions between a supervisory board and a management board.
(49) Particularly in Member States where the SE is competing with national corporate forms governed by a two-tier board, SE-incorporators have frequently resorted to the one-tier structure.
Behind CVL's public persona, is a two-tier board. On one sit volunteers from the business sector who drive its growth.
Similar approaches have also been used in South Africa under the King report (known as King II) and, despite its two-tier board system, in the Netherlands.
Other corporate governance initiatives proposed in the Action Plan cover: achieving better information on the role played by institutional investors in corporate governance; giving further emphasis to the principle of proportionality between capital and control: offering to listed companies the choice between the one-tier and two-tier board structures; and enhancing directors' responsibilities for financial and key non-financial statements.