How a new governance model can help Singapore football clubs

Singapore club football is in need of a new governance model. The Football Association of Singapore (FAS) needs to consider having all current Singapore Premier League (SPL) clubs registered as societies to be registered as charities with Institutions of Public Character (IPC) status instead.

This will help improve the governance of SPL clubs, which receive public funding from Sport Singapore (SportSG) and the Singapore Totalisator Board (Tote Board) through the FAS, and bring them in line with the FAS’ status as a registered charity since March 2011.

Based on the FAS’ financial statements for Financial Year 2017, it received about S$22.6 million from SportSG and the Tote Board. Of this, S$15.4 million was allocated to the SPL clubs for the local football league competition, known previously as the S-League.

However, how the SPL clubs spend these public funds and other monies raised through their operations remains unclear to the public. This is because the clubs do not need to make their accounts public, and only need to report their accounts to the FAS and to the Registrar of Societies on an annual basis.

The FAS does not make public accounts submitted by the SPL clubs.

However, if Singaporean taxpayers are helping to fund the continued existence of the SPL in Singapore, then the governance model for the clubs needs to change.

Since 1996, when the S-League was born, clubs have been registered as societies. However, after 24 years of operating, it has become clear that there is hardly any commercial viability for SPL clubs in Singapore.

Take away the government grants and the subsidised use of public facilities, and the clubs will struggle to continue operations.

The SPL also lacks marketability due to the limited size of the following and interest in Singapore, let alone in the region and beyond. The fact that SPL is still funded by SportSg and the Tote Board would suggest that it has become more of a social mission to keep the league alive.

If so, it is only right then that the FAS considers shifting the administration model of SPL clubs to that of a charity with IPC status. The benefits for this are manifold.

For one thing, there will be greater transparency and accountability of the public funds involved in the administration of football. With charity status, clubs will be put under a more powerful microscope to prevent any form of financial malfeasance.

A staff member of SPL club Hougang United was recently charged with criminal breach of trust after the club filed a police report about losing almost S$280,000 from its coffers. The money was reportedly from the club’s jackpot operations.

With a charity and IPC model, clubs will also need to be absolutely clear about how their funds raised through their jackpot operations are spent, with the bulk (if not all) going to football development and club operations.

Furthermore, with funds always in short supply in football at the club level and with sponsorships rather limited, SPL clubs with IPC status will likely find it easier to raise money through donations from donors and companies as they will get tax rebates.

This is how many other charities raise funds and there is little reason why SPL clubs cannot do the same.

Clubs cannot continue with the current model of relying on handouts of public funds, and need to be able to stand on their own.

A case in point is Warriors FC, whose general manager Paul Poh told The Straits Times this week that the club did not pay some salaries on time due to late disbursement of monthly subsidies from the FAS.

The Ministry of Manpower has suspended the club’s work pass privileges after an employee of the nine-time league winner had reported the club to MOM for not paying his April 2019 salary. MOM said the club had first breached “salary-related provisons” of the Employment Act in October last year.

Being a charity will also help SPL clubs with proper succession planning and financial management.

The Code of Governance for Charities and IPCs provides clear guidelines on how charities and IPCs need governing instruments to manage matters involving the board composition, the election of office bearers and also the tenure of its members.

For example, as charities with IPC status, many other national sports associations have explicit rules in their constitution spelling out term limits on certain roles such as the president and treasurer.

The Singapore Swimming Association, for example, has an eight-year term limit for its president.

For now, it is unclear how chairmen and board members of SPL clubs are identified and selected and if there is any succession planning in place.

With added governance requirements as a charity, SPL clubs will need to upskill and ensure compliance.

However, the provision of shared services in areas such as audit, human capital management and also simple book-keeping will also assist clubs with the additional governance requirements needed.

There are already organisations appointed by the Commissioner of Charities like the Chartered Secretaries Institute of Singapore and the National Volunteer and Philanthropy Centre which provide these services at subsidised rates to smaller charities in Singapore.

To be sure, there are drawbacks in converting SPL clubs into charities.

For one thing, clubs which have been so used to operating on the current model will have adjustment issues due to the increased level of scrutiny and reporting requirements.

However, the provision of shared corporate governance services will make this potential drawback only temporary.

Another potential sticky issue would be the organisation of annual general meetings on a yearly basis where the SPL clubs will have to face its stakeholders and address any concerns they may have.

With clubs not used to this level of scrutiny, there may be some level of trepidation but again, this will only ensure a higher level of transparency and accountability in Singapore football.

After a quarter of a century of existence, it is time to recognise that professional football in its current form is not ideal.

There is a need for greater transparency, proper succession planning and better sustainability for Singapore football and making SPL clubs registered as a charity will be a good start.

ABOUT THE AUTHOR:

Jose Raymond is a former sports journalist who has served in various roles in the sports sector including as founding Vice-Chairman of the Chiam See Tong Sports Fund.  He is also founder of consultancy firm Spin Worldwide.