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.

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 ?
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.
and a two-tier board structure in the articles of association.
A two-tier board, on the other hand, consists of a management board and a supervisory board.
Under Germany's two-tier board structure for listed companies, senior managers including the chief executive are appointed by the non-executive supervisory board.
Axel Springer SE will continue to be managed by a two-tier board structure comprising the Management Board and the Supervisory Board.
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.
Companies listed in the EU should be given the option of having a unitary board structure (with executive and non-executive directors) or a two-tier board structure (with managing directors and supervisory directors).
As of the spin-off date Acordis was expected to be registered in The Netherlands and have a two-tier board system with a supervisory board and a board of management.
Ironically, Gonzaga has a two-tier board that sets it apart from most of the nation's 28 Jesuit colleges and universities because Jesuits retain greater control.