CIMA BA4 · Chapter 5 · Question 10 of 10
A company has a two-tier board structure. Which statement correctly describes it?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A supervisory board, which may include employee representatives, oversees a separate management board that runs the business
Explanation
In a two-tier structure, common in Germany, a supervisory board (often including employee representatives) appoints and monitors a separate management board of executives. A single board of executive and non-executive directors is a unitary board, as used in the UK. The roles of the two tiers are distinct, so membership is not identical.
More Corporate governance: principles and approaches MCQs
- Q2In agency theory as applied to a listed company, who are the principals and who are the agents?
- Q3What does 'comply or explain' mean in the context of a principles-based governance code?
- Q4Which of the following is an example of an agency cost?
- Q5Which of the following is a characteristic of a rules-based approach to corporate governance, as exemplified by the US Sarbanes-Oxley Act?
- Q6Which of the following is an advantage of a principles-based approach to corporate governance compared with a rules-based approach?