Explain the country that applied the One Tier Board and Two-Tier Board System and the

example of
implementation of the One Tier Board and Two-Tier Board System in the company (outside
Indonesia).

The one-tier board system is adopted by Singapore Airlines. Singapore Airlines Ltd is a
Singapore-based company that is engaged in passenger and cargo air transportation. The
organisation of the BOD in Singaporean companies follows a one-tier model in which
executive and non-executive directors operate together.
The two-tier board system is adopted by Vingroup. Vingroup JSC is a Vietnam-based
company engaged in various sectors including property, hospitality and entertainment,
consumer retail, healthcare, education, agriculture, and industrials spanning across the
country. There are two organisational layers in Vingroup board structure, including a board
of supervisors (BOS) (in charge of control decisions) and a BOD (in charge of managerial
decisions). In this regard, the two-tier board model obviously separates the executive function
of the management board from the control function of the supervisory board.

Vingroup JSC is a Vietnam-based company engaged in residential real estate investment and operations. It
develops and constructs real estate properties, including commercial, office and residential buildings and villas,
for lease and for sale

Singapore Airlines Ltd is a Singapore-based company that is engaged in passenger and cargo air transportation.
The Company’s segments include Singapore Airlines, SilkAir, Budget Aviation and SIAEC segment.

Vingroup is engaged in various sectors including property, hospitality and entertainment, consumer
retail, healthcare, education, agriculture, and industrials spanning across the country

Meanwhile, there are two organisational layers in the two-tier board model, including a board of
supervisors (BOS) (in charge of control decisions) and a BOD (in charge of managerial decisions). In
this regard, the two-tier board model obviously separates the executive function of the management
board from the control function of the supervisory board (Maassen, 2002).

Under the one-tier board model, it is recommended by the OECD (2004) that some important
committees, such as audit, remuneration, and nomination committees be established to enhance
the level of independence of the BOD through effectively implementing monitoring functions.
Although the Vietnamese Code follows the two-tier board model, it does allow Vietnamese listed
companies to establish subcommittees such as remuneration, nomination, or strategic planning
subcommittees to assist their BOD’s activities.

On the contrary, the organisation of the BOD in Singaporean companies follows a one-tier model in
which the audit, nomination and remuneration committees should be established. Mak (2007)
indicates that all of Singapore’s listed corporations have established audit committees, and most of
them (over 93%) have nomination and remuneration committees. In fact, the presence of these
subcommittees appears to have positive influences on the quality of financial reporting and auditing
effectiveness in Singapore (Goodwin & Seow, 2002).

As mentioned earlier, the one

Setidaknya terdapat dua sistem corporate governance yang dianut oleh negara-negara di dunia ini
pada umumnya, yaitu one-tier board (sistem satu kamar) dan two-tier board (sistem dua kamar atau
dualisme). Sistem two-tier board banyak digunakan negara-negara Eropa daratan, seperti Jerman
dan Belanda. Sedangkan sistem one-tier board dianut oleh negara-negara seperti Inggris dan AS.
Namun walaupun menganut satu sistem yang sama, apabila diterapkan di dua negara yang berbeda,
maka hasil yang diperoleh dapat berbeda.
Countries with two-tier boards include:

 Germany
 Austria
 Poland
 Indonesia[1

There are two systems of corporate governance adopted by the countries in the world in
general, the one-tier board system and two-tier board system. The one-tier board system
where membership of the board of commissioners and board of directors are not separated. In
this model, commissioner concurrently as a member of the board of directors and both are
referred to as the board of directors. The model is applied in the United Kingdom and the
Commonwealth member countries such as Australia, New Zealand, and others. In this single-
tier board structure, according to the US corporate law and UK corporate governance code,
there is no distinction between the role and the position of the executive and the non-
executive directors (Maasen, 1999). Both group of directors have the same legal
responsibilities and liabilities (Maasen, 1999).

Second, the model two-tier board system or a two-board system, this model firmly separating
board membership, the board of commissioners as superintendent and the board as a
corporate executive. Two-tier board systems are widely used in mainland European countries,
such as Germany and the Netherlands. These countries are known for their concentrated
ownership, whereas mainly banks, insurance companies and other institutions hold shares
(Hayes et al., 2014). In Indonesia, which is the legal basis in the form of civil law adopts a
two-tier board system, which makes a limited company has two boards that board of
commissioners and board of directors.
If we refer to the Regulations Limited liability Company in force in Indonesia, states that the board of
directors is the organ of the company's authorized and fully responsible for the management of the
company for the benefit of the company, in accordance with the purposes and objectives of the
company and to represent the company either inside or outside in accordance with the provisions of
the articles of association.

Two-tier board systems are widely used in mainland European countries, such as Germany and
the Netherlands. Meanwhile, the one-tier board system is adopted by countries such as the UK
and the US. However, even though we adhere to the same system, if it is applied in two different
countries, the results obtained can be different.

2.3.2.1 One-tier model In the Anglo-Saxon model, it is assumed that shares are widely distributed
among individuals (Hayes et al., 2014). The Anglo-Saxon one-tier board model consists of a single
layer, which only consists of the board of directors (Hayes et al., 2014). In this single-tier board
structure, according to the US corporate law and UK corporate governance code, there is no
distinction between the role and the position of the executive and the non-executive directors
(Maasen, 1999). Both group of directors have the same legal responsibilities and liabilities (Maasen,
1999). The executive directors can be seen as the management board in the two-tier board model,
whereas the non-executive directors can be seen as the supervisory board. In the one-tier model,
they are jointly responsible for the day-to-day operations. According to Maasen (1999) boards
composed of more executive directors are usually associated with a higher risk of the agency
problem between management and shareholders. A company that is structured according to the
one-tier model can have a board leadership structure that separates the duties of the CEO and chair
position of the board, but it can also have a board leadership structure that combines the roles of
the CEO and that of the chairman (Maasen, 1999). The role of the non-executive or the independent
director is crucial when it comes to monitoring the management; they are in charge of supervising
the management board to prevent divergence from the shareholders interest. Sheridan & Kendall
(1992) claims that having one group of directors monitoring the other group on the same board,
gives an uncomfortable feeling about the monitoring mechanism. However, the one-tier board
makes use of several board committees like remuneration, audit, nomination and oversight
committees(Maassen, 1999). The function of these board committees is primary to function as
decision control mechanism in the board of directors. From the Agency problem perspective, the
oversight committees might function as an additional effective monitoring mechanism to improve
independence in the one-tier board (Maassen, 1999).

2.3.2.2 Two-tier model

In Continental European countries like Germany, Netherlands and Finland companies are structured
according to the two-tier board model. These countries are known for their concentrated ownership,
whereas mainly banks, insurance companies and other institutions hold shares (Hayes et al., 2014).
In Germany for example all stock corporations are, according to the German Stock Corporation Act
of 1965, required to have a two-tier board structure (Jungmann, 2006). The board should consist of a
management board (Vorstand) and a supervisory board (Aufsichtsrat), which both have different
legal responsibilities7 . The members of the supervisory board consist of shareholders
representatives, government or labor representatives (Jungmann, 2006). The members of a board
are not permitted to be a member of both boards at the same time (Jungmann, 2006). This means
that the chairman of the 7http://www.dcgk.de//files/dcgk/usercontent/en/download/code/2015-
05- 05_Corporate_Governance_Code_EN.pdf 11 management board is in charge of coordinating the
tasks of only the management board, while the chairman of the supervisory board is in charge of
coordinating the tasks of the supervisory board. The management board is responsibility for
managing the firm in the best interests of its stakeholders, with the main objective of creating value.
The management is in charge of formulating the firm’s strategy and coordinates the implementation
and the execution of it with the supervision of the supervisory board. The tasks of the supervisory
board are emphasized in Sec. 5.1 of the German Corporate Governance Code (2015) 8 and it states
that the supervisory board should regularly advice and supervise the management board and it
should be involved in fundamental decisions that are of importance to the firm. The supervisory
board is also in charge of appointing, dismissing and determining the total compensation of the
members of the management board, while the members of the supervisory board are elected by the
shareholders of the firm during the general meeting9 . The supervisory board represents the firm in
all affairs concerning the management board, mainly by initiating lawsuits against the members of
the board (Jungmann, 2006). In addition, according to Berrar in Jungmann (2006), the supervisory
board is also responsible for approving the annual accounts and in the case where the firm’s
interests are harmed, they should intervene. At last, the supervisory board also exercises some soft
tasks, like networking with stakeholders (Davies in Jungmann, 2006). However, the main task of the
supervisory board is monitoring the management boards, while all management tasks are the
responsibility of the management board (Jungmann, 2006). On the other, hand this clear separation
between management board and supervisory board my lead to information asymmetry between the
two boards, since compared to the one-tier structure only the management board is in charge of the
day-to-day operations. For the supervisory board to act as an effective advice and control
mechanism it should consist of an adequate amount of independent members. Section 5.4.2 of the
German Corporate Governance Code (2015) 10 states that a member of the supervisory board “is
considered independent if he/she has no business or personal relations with the company or its
Management Board which cause a conflict of interests.” In addition, a member of the management
may become a member of the supervisory board after two years of the end of their appointment or
if a motion by a shareholder, holding more than 25% of voting rights, is presented (German
Corporate Governance Code, 2015).

There are differences in terms of the corporate board prevailing in Indonesia with other countries.
This is because

there are two models of board structures; the first based single board system where membership of
the board of commissioners and board of directors are not separated. In this model, commissioner
concurrently as a member of the board of directors and both are referred to as the board of
directors. The model is applied in the United Kingdom and the Commonwealth member countries
such as Australia, New Zealand, and others.

Second, the model two-tier board system or a two board system, this model firmly separating board
membership, the board of commissioners as superintendent and the board as a corporate executive.
In Indonesia, which is the legal basis in the form of civil law adopts a two-tier board system, which
makes a limited company has two boards that board of commissioners and board of directors. If we
refer to the Regulations Limited liability Company in force in Indonesia, states that the board of
directors is the organ of the company's authorized and fully responsible for the management of the
company for the benefit of the company, in accordance with the purposes and objectives of the
company and to represent the company either inside or outside in accordance with the provisions of
the articles of association.

Thus it can be said directors as trustee well as agent for the limited liability company. Told as a
trustee because the board of directors to supervise the assets of the company, and as an agent
because the directors acted out for and on behalf of the company. Meanwhile, the board of
commissioners has an important role, its main task is to oversee the policy and implementation of
the directors in running the company and advise the board of directors. Policies that concern board
of commissioners are strategic and important. The task of the board of commissioners is often
referred to as business oversight because it involves the monitoring of the company to survive, do
business and grow/develop. Monitoring role of the corporate board has been studied extensively,
and an important measure of monitoring and effectiveness of the board of the company is the
frequency of board meetings (Lipton and Lorsch 1992; Jensen 1993; Conger et al., 1998; Vafeas,
1999; Brick and Chidambaran, 2007).
Pada tahun 2017, Beras Maknyuss dan beras Cap Ayam Jago, dua merek bisnis beras TPS Food yang
familiar di kala itu mendapat sentimen negative. Hal ini disebabkan karena bisnis beras yang dikelola
anak usaha perseroan PT Indo Beras Unggul terbukti mengoplos. perusahaan yang menyebut
memproduksi beras dari gabah petani dan mengolahnya menjadi kelas premium, ternyata justru
menggunakan beras subsidi.

Pascakasus tersebut, pada tahun 2018, Perusahaan tak memiliki kemampuan untuk membayarkan
kewajibannya atas utang yang diterbitkannya. Utang yang dimaksud adalah dalam bentuk Obligasi
dan Sukuk Ijarah TPS Food I tahun 2013 masing-masing memiliki nilai sebesar Rp 600 miliar dan Rp
300 miliar. Kedua instrumen ini memiliki tingkat kupon dan imbal hasil sebesar 10,25% yang
harusnya dibayarkan tiap 3 bulan. kesulitan bayar bunga dan pokok obligasi ini berujung pada gagal
bayar.

In 2017, Maknyuss Rice and Cap Ayam Jago rice, two brands of TPS Food's rice business received
negative sentiments. This happened because the rice business managed by a subsidiary of PT Indo
Beras Unggul has proven to be mixed. Rice, which is said to have premium quality, is suspected of
cheating consumers.

After that case, in 2018, the Company did not have the ability to pay its obligations for the debt it
issued. The debt in question is in the form of bonds and Sukuk Ijarah TPS Food I in 2013, each having
a value of Rp. 600 billion and Rp. 300 billion. Both of these instruments have a coupon and yield rate
of 10.25%, which must be paid every 3 months. difficulty in paying interest and principal on these
bonds resulted in default.

Awal cerita kisruh ini bermula dari amburadulnya bisnis beras yang dikelola anak usaha perseroan PT
Indo Beras Unggul karena terbukti mengoplos.

Pascakasus tersebut, kesulitan keuangan mulai mendera TPS Food yang dimulai dari kesulitan bayar
bunga dan pokok obligasi yang berujung pada gagal bayar.

Beras Maknyuss dan beras Cap Ayam Jago, dua merek bisnis beras TPS Food yang familiar di kala itu
kena sentimen negatif. Barangkali masih ingat berita penggerebekan gudang beras di pasar induk
pada 2017?

Ya, beras yang digadang memiliki kualitas premium ini justru membawa masalah untuk perusahaan.
Dituding mencurangi konsumen, Penyidik Direktorat Tindak Pidana Ekonomi Khusus Bareskrim Polri
membuikan Direktur Utama PT Indo Beras Unggul (IBU) berinisial TW.

Untuk mengingatkan, IBU ini merupakan cucu usaha TPS Food di divisi Beras yang dikepalai oleh PT
Dunia Pangan.

Mati-matian perusahaan membela IBU, namun tak berbuah hasil. Pihak berwenang tak
mempercayai penjelasan perusahaan yang menyebut dari gabah petani dan mengolahnya menjadi
kelas premium, bukan menggunakan beras subsidi.
Namun baru saja satu kuartal di 2018, lagi-lagi cobaan datang. Perusahaan tak lagi memiliki
kemampuan untuk membayarkan kewajibannya atas utang yang diterbitkannya.

Utang yang dimaksud adalah dalam bentuk Obligasi dan Sukuk Ijarah TPS Food I tahun 2013 masing-
masing memiliki nilai sebesar Rp 600 miliar dan Rp 300 miliar. Kedua instrumen ini memiliki tingkat
kupon dan imbal hasil sebesar 10,25% yang harusnya dibayarkan tiap 3 bulan.

Surat utang ini seharusnya jatuh tempo pada 5 April 2018, namun karena ketidaksanggupan
perusahaan untuk membayarkannya, mau tak mau harus meminta kerendahan hati pemegang
obligasi untuk menunda pembayaran.

Akibat tak dibayar, akhirnya pemegang obligasi ini mengajukan proses Penundaan Kewajiban
Pembayaran Utang (PKPU). Pada Maret 2018 perusahaan melakukan Rapat Umum Pemegang
Obligasi (RUPO) dan meminta untuk memperpanjang tenornya hingga 12 bulan kemudian.

Dalam kasus TPS Food, pada tahun 2019 TPS Food merilis laporan Hasil Investigasi Berbasis Fakta PT
Ernst & Young Indonesia (EY) atas laporan keuangan tahunan TPS Food 2017. investigasi ini
merupakan salah satu permintaan dari para pemegang saham saat dilangsungkannya RUPSLB
Oktober 2018. Laporan tersebut menyebutkan adanya dugaan penggelembungan ditengarai terjadi
pada akun piutang usaha, persediaan, dan aset tetap TPS Food senilai nilai Rp 4 triliun oleh
manajemen lama pada beberapa pos akuntansi. manajemen lama sebelum RUPSLB yang dimaksud
yakni Joko Mogoginta sebagai direktur utama dan tiga orang direksi lain: Budhi Istanto, Hendra
Adisubrata, dan Jo Tjong Seng. Selain itu terdapat juga temuan dugaan penggelembungan
pendapatan senilai Rp 662 miliar dan penggelembungan lain senilai Rp 329 miliar pada pos EBITDA
entitas bisnis makanan dari emiten tersebut.

Hal mendasar dari hasil laporan EY tersebut adalah adanya pencatatan keuangan yang berbeda
dalam data internal dengan pencatatan yang digunakan auditor keuangan dalam proses mengaudit
laporan keuangan 2017. Belum lagi, EY mendasari dari informasi manajemen baru bahwa
manajemen lama AISA membuat pembukuan yang berbeda untuk tujuan eksternal, misalnya untuk
kepentingan audit eksternal. Tindakan ini tentunya melanggar prinsip Transparan dalam tata kelola
perusahaan yang baik karena tps food mengungkapkan fakta material yang dan informasi
perusahaan yang tidak akurat.

Transparency means the disclosure of Company Information and material facts in

timely, clear, accurate and accessible manners to the public. Based on the PT Tiga
Pilar Sejahtera Food case, in 2019 TPS Food released a fact-based investigation report
of PT Ernst & Young Indonesia (EY) on the annual financial report of TPS Food
2017. The report states that there is a suspicion of an increase in the accounts
receivable, inventory, and fixed assets of TPS Food worth Rp. 4 trillion by the old
 management in several accounting posts. In addition, there were also findings of
allegations of Rp.662 billion in earnings and another Rp.329 billion in EBITDA.
The fundamental thing from the results of the EY report is that there are different
financial records in the internal data with the records used by the financial auditors in
the process of auditing the 2017 financial statements. In addition, EY reports that
AISA's old management made different books for external purposes, for example for
the purposes of external audit. This action certainly violates the transparency principle
of good corporate governance because TPS Food reports inaccurate company
information.

Tahun berganti. Maju ke Maret 2019, secara mengejutkan TPS Food merilis keterbukaan informasi di
BEI sebuah laporan Hasil Investigasi Berbasis Fakta PT Ernst & Young Indonesia (EY) atas laporan
keuangan tahunan TPS Food 2017.

Usut punya usut, investigasi ini ternyata merupakan salah satu permintaan dari para pemegang
saham saat dilangsungkannya RUPSLB Oktober 2018.

Laporan tersebut menyebutkan adanya dugaan penggelembungan ditengarai terjadi pada akun
piutang usaha, persediaan, dan aset tetap TPS Food senilai nilai Rp 4 triliun oleh manajemen lama
pada beberapa pos akuntansi.

Sasarannya tentu manajemen lama sebelum RUPSLB yakni Joko Mogoginta sebagai direktur utama
dan tiga orang direksi lain: Budhi Istanto, Hendra Adisubrata, dan Jo Tjong Seng.

Selain penggelembungan Rp 4 triliun tersebut, ada juga temuan dugaan penggelembungan

pendapatan senilai Rp 662 miliar dan penggelembungan lain senilai Rp 329 miliar pada pos EBITDA
(laba sebelum bunga, pajak, depresiasi dan amortisasi) entitas bisnis makanan dari emiten tersebut.

Temuan lain dari laporan EY tersebut adalah aliran dana Rp 1,78 triliun melalui berbagai skema dari
Grup AISA kepada pihak-pihak yang diduga terafiliasi dengan manajemen lama.

"Antara lain menggunakan pencairan pinjaman Grup AISA dari beberapa bank, pencairan deposito
berjangka, transfer dana di rekening bank, dan pembiayaan beban pihak terafiliasi oleh Grup AISA,"
tulis laporan tersebut.
Selain itu, ditemukan juga adanya hubungan serta transaksi dengan pihak terafiliasi yang tidak
menggunakan mekanisme pengungkapan (disclosure) yang memadai kepada stakeholders secara
relevan.

Hal mendasar dari hasil laporan EY tersebut adalah adanya pencatatan keuangan yang berbeda
dalam data internal dengan pencatatan yang digunakan auditor keuangan dalam proses mengaudit
laporan keuangan 2017.

Belum lagi, EY mendasari dari informasi manajemen baru bahwa manajemen lama AISA membuat
pembukuan yang berbeda untuk tujuan eksternal, misalnya untuk kepentingan audit eksternal.

Dituduh menggelembungkan dana, Joko Mogoginta dengan tegas menjawab, "Itu ngawur!"

Namun demikian, saat ini manajemen baru perusahaan masih belum menindaklanjuti hasil temuan
tersebut. Hengky, yang kini direktur utama justru masih fokus menyelesaikan sengkarut dalam
internal perusahaan. Dia ibarat digempur depan dan belakang.

Tindakan ini tentunya melanggar prinsip independen dalam tata kelola perusahaan yang baik akibat
paksaan dari pihak ketiga.