ICANBusiness, Management and FinanceOrganisational Structure and Culture2020

The board of Crescent Insurance Company Limited, a public interest entity regulated by the National Insurance Commission (NAICOM), is debating whether to adopt a unitary (one-tier) or a two-tier board structure. Which of the following statements MOST accurately reflects the governance implication of a two-tier board structure?

AA two-tier board combines supervisory and executive functions within a single board, improving speed of decision-making
BA two-tier board separates the supervisory board from the management board, enhancing independence of oversightCORRECT
CA two-tier board is mandated for all insurance companies under CAMA 2020
DA two-tier board eliminates the need for an audit committee as required by the FRCN Code
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Why the answer is B, and why the others tempt you.
A two-tier board structure separates the supervisory board (responsible for oversight and accountability) from the management board (responsible for day-to-day operations), thereby enhancing the independence of oversight. This is distinct from a unitary board, which combines both functions. Option A describes a unitary board. CAMA 2020 does not mandate a two-tier structure for all insurance companies, and a two-tier board does not eliminate audit committee requirements under the FRCN Code.
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