What are the unitary and two-tier board structures?

What are the unitary and two-tier board structures?

Boards can be classified into two general categories: 1) unitary boards or 2) two-tier board
1. Unitary boards include both executive and non-executive directors and make decisions as a unified group.

2. Two -tier boards have two separate boards: a) the management board and b) the supervisory board.

a) The management board generally  includes only executives. It focuses on major operational issues and is headed by the chief executive.

b) The supervisory board deals with the strategic decisions and oversees the management board. The chairman of the company sits on the supervisor board. Supervisory boards consist exclusively of non executive directors.

The supervisory board  is often used as a way to represent various stakeholder groups, by including representatives on the board, such as employees or environmental consultants. Two- tier boards are effective relationship between the chief executive (head of the management board) and the chairman (head of the supervisory board).