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Governance 5 min read Published Updated Credibility 40/100

Governance Briefing — April 4, 2023

Singapore’s refreshed 2023 Code of Governance raises expectations on board independence, risk management, fundraising transparency, and data protection under a tiered comply-or-explain regime starting in FY2024.

Zeph Tech Research Lead

Research lead, Zeph Tech

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Executive briefing: Singapore’s Charity Council launched the updated Code of Governance for Charities and Institutions of a Public Character on 4 April 2023, introducing tiered best practices, refreshed board responsibilities, and strengthened internal controls effective for financial years beginning 1 January 2024. Charities must adopt a “comply or explain” approach, with disclosures in annual reports and the Charity Portal detailing adherence to principles covering board effectiveness, strategic planning, conflict management, fundraising ethics, financial stewardship, and data protection.

Capabilities: Key changes in the 2023 Code

The revised Code consolidates governance guidelines into three tiers—Basic, Enhanced, and Advanced—based on annual receipts and IPC status. It emphasises proportional implementation while raising expectations for larger organisations:

  • Board composition and renewal. Boards should have at least 50% independent members in the Advanced tier, implement term limits (typically 10 years), and conduct annual performance evaluations.
  • Strategic planning and risk management. Charities must document strategic plans, monitor performance indicators, and embed risk management frameworks. Advanced-tier charities should establish board risk committees or equivalent oversight.
  • Internal controls and financial management. Enhanced requirements include segregation of duties, whistleblowing policies, reserves policies, and periodic independent reviews of internal controls.
  • Fundraising and donor stewardship. The Code mandates transparent reporting of fundraising costs, donor data protection, and compliance with the Charities (Fund-Raising Appeals) Regulations.
  • Digital governance. New guidance addresses cybersecurity, data governance, and responsible use of technology, urging charities to appoint data protection officers and implement incident response plans.

The Charity Council also released implementation guides and training resources to assist boards and management teams. IPCs must upload Governance Evaluation Checklists (GEC) reflecting the new Code starting from FY2024 submissions.

Implementation sequencing: Transitioning to the 2023 Code

Phase 1 — Gap assessment. Convene board and management workshops to review current governance practices against the new tier requirements. Document gaps in board independence, committee structures, policies, and disclosures. Determine resourcing needs—such as compliance staff, training, or technology upgrades.

Phase 2 — Policy development. Update board charters, conflict of interest policies, whistleblowing procedures, and reserves policies to align with the Code. Establish succession plans, diversity goals, and evaluation processes. Draft or enhance risk management frameworks, including risk registers, mitigation plans, and reporting cadences. Implement or refine data protection policies aligned with Singapore’s Personal Data Protection Act (PDPA).

Phase 3 — Execution and reporting. Roll out training for board members, executives, and volunteers on the new governance expectations. Implement internal control improvements (segregation of duties, dual signatories, procurement checks). Develop dashboards to monitor KPIs, risk indicators, and compliance metrics. Prepare narrative disclosures for annual reports, highlighting compliance status, explanations for deviations, and action plans.

Responsible governance and oversight

The Code reinforces fiduciary duties: boards must act in the charity’s best interests, avoid conflicts, and ensure prudent financial management. Independent board chairs or lead directors should facilitate open discussion and manage potential conflicts. Audit committees must oversee financial reporting, external audit relationships, and remediation of control deficiencies. Larger charities should consider internal audit functions or periodic external reviews.

Risk governance extends to safeguarding beneficiaries, volunteers, and staff. Charities should implement safeguarding policies, background checks, and incident reporting mechanisms. Data governance covers collection, storage, and sharing of beneficiary information; organisations must ensure secure systems and clear consent processes.

Transparency expectations include timely publication of annual reports, financial statements, and impact metrics. Charities should engage stakeholders through town halls, digital updates, and feedback mechanisms to build trust.

Sector playbooks

Social services and healthcare charities. Prioritise safeguarding and clinical governance, ensuring compliance with Ministry of Social and Family Development (MSF) and Ministry of Health (MOH) standards. Implement case management systems with role-based access controls and audit trails.

Education and youth organisations. Focus on volunteer management, child protection policies, and program evaluation metrics. Align governance with Ministry of Education guidelines and integrate student feedback loops.

Arts and heritage institutions. Emphasise intellectual property management, fundraising transparency, and board diversity to include artistic expertise. Develop digital preservation strategies and community engagement plans.

Environmental and animal welfare groups. Strengthen data collection on environmental impact, compliance with conservation regulations, and donor reporting on project outcomes. Coordinate with National Parks Board and other regulators on permits and ethical standards.

Measurement and continuous improvement

Track compliance through dashboards summarising governance checklist completion, board training hours, policy review cycles, fundraising cost ratios, and incident reports. Conduct annual board effectiveness surveys and independent governance reviews every three years for Enhanced and Advanced tiers. Monitor PDPA compliance metrics, cybersecurity incident response times, and volunteer retention rates.

Use audit findings and stakeholder feedback to update policies and training. Report progress transparently in annual reports and the Governance Evaluation Checklist. Engage with the Charity Council’s shared services and capability-building programmes to stay abreast of emerging governance practices.

Charities that demonstrate strong governance may enhance donor confidence, attract talent, and qualify for government grants. Conversely, non-compliance can lead to regulatory actions, funding withdrawal, or reputational harm.

Capability building and digital maturity

The Charity Council is expanding shared services—such as governance clinics, board matching programmes, and digital transformation grants—to help organisations meet the Code’s requirements. Charities should evaluate eligibility for schemes like the Charities Capability Fund and the Digital for Life movement to finance technology upgrades and training.

Investing in digital tools for volunteer management, donor engagement, and financial reporting can improve transparency while reducing manual workloads. Selecting systems with audit trails, role-based access, and PDPA-compliant data handling will support both governance obligations and operational resilience.

Boards should document how they evaluate programme impact and stakeholder feedback, linking outcomes to resource allocation decisions and reporting these insights in annual reviews to demonstrate effectiveness under the Code.

Sources

Zeph Tech equips Singapore charities with governance diagnostics, policy toolkits, and reporting systems to meet the 2023 Code’s expectations.

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