Test yourself

Read the text about Corporate Governance and complete the charts presenting one-tier and two-tier board systems with the words and expressions from the text.
Corporate governance

Corporate governance is the study of the power relations between the Board of Directors and those who elect them (shareholders in the General Meeting and employees). Companies differ in the form of internal structure – some of them have a two-tier board and some – a one-tier board . The United Kingdom, the United States, and most Commonwealth countries have single unified Boards of Directors. An individual selected as President and CEO (Chief Executive Officer) of a corporation reports to the Board of Directors.

In Germany, companies have two tiers, i.e. shareholders (and employees) elect a Supervisory Board for control purposes. Then the Supervisory Board chooses the Management Board or the Executive Board for the day-to-day business. In this system, the CEO presides over the executive board and the chairman presides over the supervisory board, and these two roles will always be held by different people to prevent a conflict of interest and too much power being concentrated in the hands of one person. There is the option to use two tiers in France, and in the new European Companies (i.e. European public companies; a universal, European form of running a business in the European Union). Since German company law has also served as an example for the development of national legal systems in several Eastern European countries, the representatives of the two-tier model also include countries like Poland, Czechia, Slovakia, Bulgaria and Latvia.


General Meeting of (1 p.) -------> (1 p.) of Directors -------> (1 p.) & CEO


(1 p.) General Meeting/AGM (of shareholders) -------> (1 p.) Board with the chairman -------> (1 p.) /Executive Board with the President/CEO