Singapore

Charities must explain why board members are allowed to serve beyond 10 years

Charities must explain why board members are allowed to serve beyond 10 years
TODAY file photo
Published: 9:15 PM, April 6, 2017
Updated: 10:51 PM, April 6, 2017

SINGAPORE — From next January, charities will have to disclose the reasons for letting members serve on their boards beyond 10 years. This is among several refinements to the Code of Governance for Charities and Institutions of a Public Character. 

The initial proposed guideline would have imposed a 10-year term limit for at least two-thirds of board members. 

However, feedback from industry players led to tweaks in the suggestion. Other refinements, announced on Thursday (April 6) after a month-long public consultation last year, include enhanced disclosure of information on board members, introducing risk management protocols, and a new definition of charity size.

The term limit for board members was put on hold because the majority of feedback gathered within the charity sector felt it was “too stringent”, the Charity Council said in a press statement.

“Quite a number of charities feel they need time to look for a replacement … So we don’t remove the recommendation. It is still an important (one), but we tweak it for the time being,” said council chairman 
Gerard Ee. 

The council intends to introduce the term limit in two years, when the charities are better prepared, he told TODAY.

Still, strengthening disclosure will help individual donors and grant-makers to make more-informed decisions on giving and encourage charities to be transparent with board succession, Mr Ee added.

An initial proposal for large charities — those with gross annual receipts or a total expenditure of at least S$10 million — to set in place a whistle-blowing policy was also tweaked, with the new Code requiring that these organisations “disclose in its annual report whether it has a whistle-blowing policy”.

Again, this revision was made to give charities more time to build up their capabilities.

Under the new Code, charities must also put in place processes to identify, monitor and review their key risks. Information on board members, such as their names, appointments and date of appointments, must also be stated in the charities’ annual reports.

Small charities that have gross annual receipts or total expenditure of less than S$50,000 are not required to submit the Governance Evaluation Checklists, but are still encouraged to abide by guidelines in the Code.

While the new Code does not intend to “overburden” smaller charities with compliance, it incorporates best practices that pave the way for their growth, said Mr Ee. 

Mr Choo Jin Kiat, executive director of voluntary welfare organisation O’Joy Care Services, said the guideline to disclose board members’ terms will help diversity board demographics and encourage innovation in the charity sector.

“It can help newer ideas flow up ... The board is the leadership. If (its) statement is always, why do we need to change (the way we do things), then the charity may not be able to keep pace with changes in society,” he added.