In countries where there is greater inclusivity in decision-making, or where there is a strong family dominance, it is possible that a
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The 2-tier system may also operate with family dominated companies, with family members having their own top-level private Board which has controlling voting rights (and therefore where the true decision-making power rests).
To an extent, schools in the UK may be seen to have a 2-tier system, with the Head / Principal and a small number of senior teachers on a management board, with the School Governors in a more supervisory role.
Of course, schools naturally have a lot of stakeholders (parents, teachers etc.) so would seem well-suited to this structure. 2-tier board will exist. Management Board will run the day to day operations of the company, but will be monitored by a higher level Supervisory Board. In UK terms, this is similar to having the NEDs on a top board, with the Executive Directors on a separate lower Board. Advantages of 2-tier boards ● Where there is a large Board, splitting into 2 may make discussion and decision making easier.
● The existence of 2 Boards allows for more stakeholders to be involved.
● By separating NEDs from the Executive Directors, the independence of the NEDs is likely to be improved.
A
The 2-tier system may also operate with family dominated companies, with family members having their own top-level private Board which has controlling voting rights (and therefore where the true decision-making power rests).
To an extent, schools in the UK may be seen to have a 2-tier system, with the Head / Principal and a small number of senior teachers on a management board, with the School Governors in a more supervisory role.
Of course, schools naturally have a lot of stakeholders (parents, teachers etc.) so would seem well-suited to this structure. 2-tier board will exist. Management Board will run the day to day operations of the company, but will be monitored by a higher level Supervisory Board. In UK terms, this is similar to having the NEDs on a top board, with the Executive Directors on a separate lower Board. Advantages of 2-tier boards ● Where there is a large Board, splitting into 2 may make discussion and decision making easier.
● The existence of 2 Boards allows for more stakeholders to be involved.
● By separating NEDs from the Executive Directors, the independence of the NEDs is likely to be improved.
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