Hard2 marksMultiple Choice

Organisational structure, culture, governance and sustainabilitySection ASyllabus BCorporate Governance

ACCA · Question 08 · Organisational structure, culture, governance and sustainability

In a German robotics manufacturing firm, corporate governance is structured using a two-tier board system. Which of the following statements accurately describes the composition and function of the 'Supervisory Board' in this system?

Answer options:

It consists of executive directors who manage the day-to-day operations of the company.

It consists entirely of non-executive directors and employee representatives, and its role is to oversee the Management Board.

It is a combined board of both executive and non-executive directors chaired by the CEO.

It is an external government regulatory body that audits the company's financial statements.

How to approach this question

Recall the two-tier board structure (common in Germany). It splits governance into a Management Board (executives) and a Supervisory Board (non-executives/stakeholders).

Full Answer

B.It consists entirely of non-executive directors and employee representatives, and its role is to oversee the Management Board.✓ Correct

A two-tier board separates management and oversight. The Management Board runs the company, while the Supervisory Board (comprising NEDs and often employee reps) oversees the Management Board, ensuring independent governance.

Common mistakes

Confusing the unitary board (where executives and NEDs sit together) with the two-tier system.

Question 07 All questions Question 09

Practice the full ACCA BT — Business & Technology Practice Exam 6

52 questions · hints · full answers · grading

More questions from this exam

Q01AeroFarms, a vertical farming startup, is planning to build a massive indoor facility in an urban...Medium Q02AstroMine Inc. is a commercial space exploration company preparing to extract rare earth metals f...Medium Q03SynthoMeat Ltd produces lab-grown synthetic beef. Recently, the price of traditional farmed beef ...Hard Q04StreamForge is a new esports broadcasting platform. The industry is currently dominated by two ma...Medium Q05A national economy is currently experiencing a prolonged period of 'stagflation'. How is this mac...Medium

View all 52 questions →