Germany is most likely to use a two-tier board structure. Here’s a detailed explanation:

Two-Tier Board Structure: A two-tier board structure consists of a management board and a

supervisory board. The management board is responsible for day-to-day operations, while the

supervisory board oversees the management board and represents the interests of shareholders.

Germany’s Corporate Governance: Germany is well-known for its two-tier board system, which is a

legal requirement for many large companies, especially those listed on the stock exchange. The

supervisory board includes employee representatives, which is a unique feature of the German

system.

Comparison with Other Countries:

USA: The USA typically uses a single-tier board structure where a single board of directors oversees

the company’s management. This board often includes a mix of executive and non-executive

directors.

Japan: Japan has traditionally used a single-tier board structure but has been increasingly

incorporating elements of a two-tier system, such as appointing outside directors. However, it does

not predominantly use a two-tier structure like Germany.

CFA ESG Investing Reference:

The CFA Institute highlights that Germany’s corporate governance is characterized by the two-tier

board system, which separates management and supervisory functions (CFA Institute, 2020).

This structure aims to improve oversight and accountability, aligning with Germany’s emphasis on

stakeholder engagement and corporate responsibility​​​​.

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