Organisational structure, culture, governance and sustainability — ACCA Practice Question 08

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Recall the two-tier board structure (common in Germany). It splits governance into a Management Board (executives) and a Supervisory Board (non-executives/stakeholders).

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B.It consists entirely of non-executive directors and employee representatives, and its role is to oversee the Management Board.✓ Correct

A two-tier board separates management and oversight. The Management Board runs the company, while the Supervisory Board (comprising NEDs and often employee reps) oversees the Management Board, ensuring independent governance.

Common mistakes

Confusing the unitary board (where executives and NEDs sit together) with the two-tier system.

In a German robotics manufacturing firm, corporate governance is structured using a two-tier board system. Which of the following statements accurately describes the composition and function of the 'Supervisory Board' in this system?

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Practice the full ACCA BT — Business & Technology Practice Exam 6

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