Feedback wanted on tweaks to charities' code of governance

Mr Gerard Ee is chairing the Charity Council to improve transparency and accountability of charities' code of governance.
Mr Gerard Ee is chairing the Charity Council to improve transparency and accountability of charities' code of governance.PHOTO: ST FILE

Charity Council proposes changes to improve transparency and accountability

Charities should disclose information on their board members - including their attendance at board meetings, their pay and when they were appointed.

They should also declare the pay packet for each of their three highest-paid staff, if the person's pay exceeds $100,000 a year.

These guidelines - some of which already apply to larger charities - will be extended to cover almost all charities, under proposed changes to the code of governance for the charity sector.

  • Proposed changes

  • Disclosure of board members' names, board appointments and dates of appointment

    NOW: This is required by law, for charities with annual receipts or expenditure of $500,000 and above.

    NEW: This is a guideline in the new basic tier, that is, for charities with annual receipts of over $50,000 and all Institutions of a Public Character (IPCs).

    Disclosure of number of board meetings in the year, and attendance of each board member

    NOW: No such guideline.

    NEW: Guideline in basic tier.

    Disclosure of board members' pay in annual report

    Generally, board members should not be paid for their services on the board. If they are, the pay and benefits should be declared in the annual report.

    NOW: This guideline applies only to charities with annual receipts of above $10 million and IPCs with annual receipts of above $200,000.

    NEW: Guideline in basic tier.

    Disclosure of pay of each of charity's three highest-paid staff, if this exceeds $100,000 a year

    NOW: This is a guideline for large charities with annual receipts of above $10 million, and IPCs with annual receipts of above $200,000.

    NEW: Guideline in basic tier. Total annual pay also includes any pay received in a charity's subsidiaries. The charity should also disclose if any of the three top-paid staff serves on the board.

    Maximum term limit of 10 years for at least two-thirds of the board members

    NOW: No such guideline.

    NEW: Guideline for large charities with annual receipts of above $10 million, and IPCs with annual receipts of above $500,000.

Small charities with annual receipts or total expenditure of less than $50,000 will be exempt from these, as well as from submitting online checklists that evaluate their governance.

Such charities usually have fewer staff and more resource constraints, and find it tougher to meet the guidelines. They make up about 10 per cent of the more than 2,000 charities in Singapore.

The Charity Council is asking the public for feedback on the proposed changes, and the consultation paper can be read online from today.

The council promotes good governance in the sector and advises the Commissioner of Charities on regulatory issues. The code of governance is a best practices guide for charities to improve their transparency and public accountability.

It was introduced in 2007, and refined once in 2010. The latest refined code is expected to be launched early next year.

The council said yesterday that it started on the latest refinement in August last year, "to enhance the code's relevance and clarity, taking into consideration developments in other jurisdictions and increased global focus on good governance, transparency and accountability to enable informed giving decisions".

The guidelines are tiered, depending on the charity's financial size and status as an Institution of a Public Character (IPC).

In giving the rationale for extending some guidelines to mid-sized charities, the council said: "Charities are public-interest entities and receive tax exemption on their income. Therefore, there is a greater need for transparency and accountability to the public for all charities to whom the code applies."

It also noted that key decisions are made at board meetings and it wants to encourage regular attendance at the meetings, even if this is done via teleconferencing.

Mr Delane Lim, who is not paid as an executive director and board member of the Character and Leadership Academy, said he does not mind having to disclose more information, noting that safeguards and transparency are important. His charity, which conducts youth outreach programmes, had an annual income of about $70,000 in the financial year ending in April last year.

"There will probably be more paperwork, and we don't have many staff to do that, but I think it's okay as long as the process is seamless and convenient," he said.

"If the authorities start asking for many supporting documents like Central Provident Fund statements, or insist that attendance at every board meeting is very high, then that may be quite ridiculous."

Other proposed changes include introducing a maximum term of 10 consecutive years for at least two-thirds of the charity's board members. This is generally for larger charities.

The council originally proposed to have this guideline apply to all board members, to encourage renewal and introduction of "fresh ideas". But it decided to allow more flexibility after receiving feedback from dialogues with charities.

Mr Gerard Ee, who chairs the council, told The Straits Times: "For a religious charity where the founder sits on the board, the charity may not want the founder to step down from the board after 10 years."

The council also recommended that larger charities set in place whistle-blowing policies and risk-management processes.

• The public has until Oct 18 to send feedback on the proposed changes to charity_council_sec@mccy.gov.sg

• The consultation paper is available at www.charities.gov.sg and www.reach.gov.sg

A version of this article appeared in the print edition of The Straits Times on September 20, 2016, with the headline 'Feedback wanted on tweaks to charities' code of governance'. Print Edition | Subscribe