Volkswagen’s two-tier board structure Under German company law, it is mandatory for all public companies to have two boards – a supervisory board and management board. The supervisory board is composed of 20 members, and the board appoints and oversees the members of the management board, and authorises major business decisions. The Co-Determination Act of 1976 stipulates that companies with more than 20,000 employees must have 20 seats on their supervisory board. Under German company law, all public companies are required to have two boards – a management board and a supervisory board. Discuss the advantages and disadvantages of adopting a two-tier board structure, and draw a comparison with the one-tier board structure.
Volkswagen’s two-tier board structure
Under German company law, it is mandatory for all public companies to have two boards – a supervisory board and management board. The supervisory board is composed of 20 members, and the board appoints and oversees the members of the management board, and authorises major business decisions. The Co-Determination Act of 1976 stipulates that companies with more than 20,000 employees must have 20 seats on their supervisory board.
Under German company law, all public companies are required to have two boards – a
management board and a supervisory board. Discuss the advantages and disadvantages of
adopting a two-tier board structure, and draw a comparison with the one-tier board
structure.
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