One and two-tier governance systems

IN January 2014, the Singapore Manufacturing Federation (SMF) inaugurated a board of governors to sit above a (largely) elected council in order "to enhance the federation's corporate governance and accountability".

More specifically, the role of this board of governors is to "mediate and resolve issues, in the unlikely though possible event of serious council disagreements, or in the event where there is an unjustifiable draw on the past accumulated reserves of the federation".

The SMF's move to a two-tier governance structure took the sector somewhat by surprise because it runs against the preference in Singapore, the US and most Commonwealth countries for a one-tier governance model.

A two-tier or dual board structure is adopted in quite a few other countries such as Germany, the Netherlands, Finland and…