Which type of board legally holds the responsibility of governing a company?

The one tier board or unitary system is a governance structure where a single board of directors is responsible for both the management and oversight of a company. This type of board combines executive directors, who are involved in the daily operations of the company, and non-executive directors, who provide independent oversight. The legal responsibility of governing the company rests with this board, which is tasked with strategic decision-making, ensuring compliance with laws and regulations, and protecting the interests of the shareholders.

In contrast, the two-tier board system, which is another legitimate governance model, separates the supervisory board from the management board, with distinct roles and responsibilities. While it is also legally responsible for governing the company, it operates differently than the unitary system by having a clearer division between oversight and management tasks.

The terms non-executive board and supervisory board refer to specific roles within various board structures but do not independently describe a complete governance system. A non-executive board typically consists of directors who do not engage in the day-to-day management and reach advisory or oversight decisions, while the supervisory board specifically refers to part of the two-tier governance structure that provides oversight.

Overall, the one tier board is characterized by its legal responsibility for governance encapsulated within a single structure