Charity Council introduces board-term limit, ESG concept to code of governance
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THE Charity Council has published a revised code of governance for charities and institutions of a public character (IPCs).
The revision takes effect from the charities’ financial year beginning on or after Jan 1, 2024, announced the council on Tuesday (Apr 4).
The new code follows an extensive public consultation held with members of the public and charities from May to June 2022.
Under the new code, it has been recommended that IPCs and large non-IPC charities impose a maximum term limit of 10 consecutive years for all board members. Following this term limit, members may be reappointed after a break of at least two years.
This is the first time that an overall board-term limit has been recommended since the code was introduced in 2007. The aim of this move is to encourage charities to practise succession planning at the board level, and to strengthen processes for leadership renewal, said the Charity Council.
The updated code also introduces the concept of environmental, social and governance (ESG) to the charity sector.
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It is recommended that charities keep their activities environmentally sustainable, build strong relationships with their stakeholders and community, and maintain high governance standards, while also communicating their ESG activities to their stakeholders.
Other changes include a shift to a principle-based code of governance, reducing the number of tiers of charities from four to two, and a revised compliance and scoring matrix.
“The revised code is designed to help charities apply principles and prescriptions based on their maturity and readiness to put in place effective governance systems, processes and people practices in their charities,” said Theresa Goh, chairperson of the council.
“We hope the public and organisations will provide more support to our charities after experiencing better services and programmes, and have more confidence in charities due to improvement in their governance and administration.”
The revised code is available on the Charity Portal (www.charities.gov.sg).
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