27 April 2023

The Charity Council (“Council”) has published the revised Code of Governance for Charities and Institutions of a Public Character (IPCs) (“Code”) which will take effect from the charities’ financial year beginning on or after 1 January 2024. The revised Code follows a public consultation with members of the public and the charities from 13 May 2022 to 16 June 2022. The Council announced the revised Code in a press release on 4 April 2023.

Key revisions to the Code

The revised Code provides greater clarity on the good governance guidelines for the charity sector. Taking on a new principles-based approach with guidelines, the revised Code is organised into six sections with every section starting with a general principle, followed by guidelines on how to implement the principle. Charities should keep in mind the objectives of the Code when applying the principles and guidelines.

A key revision under the revised Code is that charities should impose a maximum term limit of 10 consecutive years for all board members, with the option to
re-elect board members to serve subsequent terms.

The revised Code also introduces an environmental, social and governance (“ESG”) concept whereby charities are encouraged to keep their activities environmentally friendly and sustainable, maintain good relationships with their stakeholders, and maintain high governance standards. Charities should communicate these ESG activities to their stakeholders.

Another key revision is the reduction of the number of tiers of charities from four to two. Small and medium charities which are not institutions of a public character (“IPC”) (i.e. with gross annual receipts or total expenditure (whichever is higher) ranging from S$50,000 to less than S$10 million) are in Tier 1. All IPCs and large non-IPC charities (i.e. with gross annual receipts or total expenditure (whichever is higher) of S$10 million or more) are in Tier 2.

Under the revised Code, charities that have been putting effort to comply with Code but have yet to achieve full compliance can now select the “partial compliance” option in their Code Governance Evaluation Checklist, in addition to the existing “non-compliance” option.

The revised Code will continue to operate on a “comply or explain” basis.

Reference materials

The following materials are available on the Charity Portal website www.charities.gov.sg: