5.8 Pros and ons of a one-tier board

The main advantage of a two-tier board with supervisory directors for the Dutch is that they are used to it. This is part of their culture. One should be cautious not to change traditions abruptly.

A possible argument to stay with two-tier boards is that supervisory directors are held to a lighter degree of liability than if they were to become non-executive directors in a one-tier board. This argument is not supported by trends in case law.

Advantages of a one-tier board are more involvement of non-executive directors in strategy development and in decision making, giving them greater influence and more added value, also because they get earlier and on-sight information and therefore more knowledge about the business. They have a better feel for dilemmas and interaal disagreement of management. They can furthermore be involved in the evaluation and succession of a wider group of management. All these advantages can by interaal agreement be introduced in a two-tier board, which then tends to act as a so-called one-an-a-half-tier board. In a later stage the next step can be a one-tier board.