ACCA Strategic Business Leader (SBL) Practice Exam

What is a defining feature of a two-tier board structure?

1. A single operational board

2. A supervisory board and an operational board

3. A rotating committee of directors

4. A hierarchical board system with three levels

The correct answer is: A supervisory board and an operational board

A defining feature of a two-tier board structure is indeed the presence of both a supervisory board and an operational board. This structure, commonly found in countries like Germany, distinctly separates the oversight functions from day-to-day management. The supervisory board is responsible for the long-term strategy and overall direction of the company, ensuring accountability and compliance, while the operational board, often referred to as the management board, handles the everyday operational decisions. This bifurcation allows for better checks and balances within the corporate governance framework, as it prevents any one group from having both management and supervisory powers. The other options do not accurately represent this structure. Having a single operational board lacks the supervisory aspect altogether, while a rotating committee of directors or a hierarchical system with three levels does not align with the defined two-tier approach, which specifically requires two distinct boards with separate roles and responsibilities.