executive board

In German corporate governance, a Vorstand is the executive board of a corporation (public limited company). It is hierarchically subordinate to the supervisory board (Aufsichtsrat), as German company law imposes a two-tier board of directors.

German law confers executive powers on the executive board as a body. It is expected to act collectively and collegially. Unlike the executive committee (a.k.a. operating committee or executive council) of a U.S. or UK company, the executive board is not an adjunct of the CEO (managing director). In contrast to Japanese corporate governance, the German executive board has real decision-making power. It is, by law, the managing body of a company and cannot be instructed by any legal person, be they natural or artificial, to act in such a way as to harm the business. Executive board members are personally liable for accepting any such instructions.