Concept

Dual board

Résumé
A Dual Board or Two Tier system is a corporate structure system that consists of two bodies i.e. the Council of Delegates to govern the Board of Directors and the Board of Directors to manage a corporation. The roles and relationships between the two bodies vary across countries. The structure is composed of two bodies, the "Management Body", and the "Governance Body" each of these have different roles. In Germany, the Dual Board system is prescribed for corporations that are listed on the stock market (e.g., Lufthansa, and Adidas). It is argued that this approach results in and better serves the objectives of a social market system. Using a two tier system might also result in "more monitoring" and "less aggressive performance targets". It might also be "less efficient" from a financial market perspective. It has been suggested that financial efficiency may be impeded by reduced communication, and the higher costs of running a Dual Board. The two tier system was first adopted in German companies in the 19th century, and it became compulsory after the Second World War. Other countries that adopted a two tier approach include Finland, China, and the Netherlands. The Singapore Manufacturing Federation, recently introduced a governance body as well. In the European Union, 10 countries require the two-tier approach, 8 countries require the single tier board approach, and 9 countries allow the use of either. The Management Body meets frequently (often weekly) to deal with operational issues. Some contracting decisions and strategic planning decisions may have to be approved by the Governance Body. members of the Management Body are appointed by the members of the Governance Body (see below). Composition of "Management Body" Head of Board of Directors Chairperson cum Managing Director cum Chief Executive Officer shall be selected and appointed by the Council of Delegates Vice Chairperson cum Deputy Managing Director cum Co-Chief Executive Officer shall be selected and appointed by the Council of Delegates Members of Board of Directors The number of Executive Director cum Chief [Specialisation] Officer shall be decided and appointed by the Council of Delegates Note :- Specialisation implies finance, technology, marketing etc.
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