- Supervisory board
A supervisory board is a group of individuals chosen by the
stockholdersof a company to promote their interests through the governance of the company and to hire and supervise the executive directors and CEO. Corporate Governancedoes vary between countries, especially regarding the board system. There are countries that have a one-tierboard system (like the U.S.) and there are others that have a two-tierboard system (like Germany).
In a one-tier board all directors (both
executive directorsas well as non-executive directors) form one board.
In a two-tier board there is the
management board(all executive directors) and there is a separate supervisory board (all non-executive directors).
German corporation law
Aktiengesetzrequires all Aktiengesellschaften to have two boards:a management board called Vorstandand a supervisory board called Aufsichtsrat.
In Germany the supervisory board of large corporations is composed of 20 members, 10 of which are elected by the shareholders, the other 10 being employee representatives. The supervisory board oversees and appoints the members of the management board and must approve major business decisions.
The supervisory board, in theory, is intended to provide a monitoring role. However, appointment of supervisory board members has not been a transparent process and has therefore led to inefficient monitoring and poor Corporate Governance in some cases.(Monks and Minow, 2001)The discussion whether a one-tier or a two-tier board system leads to better corporate governance is ongoing in Germany and many other countries. Big improvements in corporate governance are an outflow of shareholders actively fulfilling their duties as owners of corporations - active private German investors and activist funds build this improvement.
Wikimedia Foundation. 2010.
Look at other dictionaries:
supervisory board — The board of directors that represents stakeholders in the governance of the corporation. Bloomberg Financial Dictionary * * * supervisory board supervisory board ➔ board1 * * * supervisory board UK US noun [C] MANAGEMENT ► in large companies in… … Financial and business terms
supervisory board — A board of non executive directors who appoint and oversee the members of the executive boards of many companies in Continental Europe. See two tier board … Big dictionary of business and management
supervisory board — noun A group of people chosen by the shareholders of a company to promote their interests through the governance of the company and to hire and supervise the executive directors and CEO … Wiktionary
Sharia Supervisory Board — International, USA Sharia Committee, Also known as a Sharia Supervisory Board. A panel of Islamic scholars that determines whether a product, practice or service is Sharia compliant. Generally, each Islamic finance institution or conventional… … Law dictionary
Board of directors — For other uses of trustee , trusty , and related terms, see Trustee (disambiguation). Board Room redirects here. For the Board Room member lounge, see Alaska Airlines. trustee in trust redirects here. A board of directors is a body of elected or… … Wikipedia
Board — The Board of Directors of the exchange, or any other body acting in lieu of and with the authority of the Board. Chicago Mercantile Exchange Glossary * * * ▪ I. US /bɔːd/ noun ► [C or S] (also board of directors) MANAGEMENT, WORKPLACE the group… … Financial and business terms
board of directors — A group of *directors with ultimate responsibility for the *stewardship of an organization. Boards of directors have been described as inescapably, the centre of the (corporate) governance system (Cadbury, 2002, 33). Boards exercise their… … Auditor's dictionary
Board System — spezifische ⇡ Organisationsverfassung der Unternehmensführung. Das B.S. vereinigt Geschäftsführung und Kontrolle in einem Gremium (Vereinigungsmodell). – Gegensatz: ⇡ Aufsichtsratssystem. 1. Rechtlich vertritt der Board of Directors in der US… … Lexikon der Economics
Supervisory control — is a general term for control of many individual controllers or control loops, whether by a human or an automatic control system, although almost every real system is a combination of both. A more specific use of the term is for a SCADA system,… … Wikipedia
Supervisory circuit — Supervisory circuits are combinations of semiconductor devices that detect and monitor voltage levels in power supplies, microprocessors, and other systems. They are protection circuits that monitor one or more system parameters. When parameter… … Wikipedia