Survey highlights gaps in disclosure and governance practices of charities

By City Of Good  /
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Singapore, 22 January 2014: In their endeavour to raise funds and attract talented leaders to serve their causes, charities here must raise the bar in governance and leadership.

Charities must practise timely board renewal, review the size of their boards and their board composition to ensure diversity in the age, gender, ethnicity, educational background and work experiences of their board members.

Governance Survey Findings

Of the 577 charities surveyed by the Centre for Non-Profit Leadership, 70.9% disclosed the names of their board members; 56.3% disclosed the gender of their board members; only six charities shared the age of their board members and eight disclosed attendance at board meetings. Such information was disclosed via websites (62.7%) and annual reports (38.8%).

Calling for greater transparency and improved disclosure and governance practices in the non-profit sector, Theresa Goh, CNPL’s President, encourages charities to address the gaps highlighted by the survey and upgrade recruitment, training and professional development of their boards. 

Ms Goh urged, “At the very least, charities who have not done so, should strive to disclose basic information of their board members. Their stakeholders and donors expect transparency and accountability. It is good practice that will give confidence to donors and inspire talented leaders to serve their cause.”

Of note, the survey reveals that charities tend to rely on personal contacts when sourcing to recruit board members. Yoon Wai Nam, CNPL’s CEO, said he is not surprised that an overwhelming 91.8% of charities are found to recruit board members through internal recommendations.

”It’s not uncommon for charities to use the contacts and recommendations of current board members to recruit new members who share a passion for their cause.”

Calling on charities to use CNPL’s services for leadership development and board matching instead, Mr Yoon said CNPL has seen a steady increase in the number of professionals volunteering on non-profit boards. In 2012, there were 105 applications to its Board Match Programme which matches professionals committed to share their skills and experience with the non-profit sector.

“These professionals can offer different perspectives, experiences and skills. They also bring varied approaches needed to complement existing know-how especially in critical areas such as HR practices, fund-raising and corporate governance,” Mr Yoon added.

Credit Suisse, through CNPL, has matched a number of its senior executives to boards of charities. Mr Lito Camacho, Vice Chairman Asia Pacific and Singapore CEO, said, ”Credit Suisse places significant emphasis on philanthropy and staff volunteerism. As part of our continuous effort in engaging staff in skills-based volunteering, serving on non-profit boards allows our executives to use their expertise and skills in helping to achieve each non-profit’s mission in serving their beneficiaries.

Credit Suisse is also delighted to sponsor this survey on disclosure and governance practices of charities in Singapore.  As a corporate grant-maker, we value transparency and accountability of the charities we work with.  Greater disclosure of key attributes of board members would enable us to gain confidence in their leadership and encourage a stronger partnership in serving the disadvantaged community.”

Other Key Highlights of the Survey Findings:

  • Of the available information for 1,717 board members, over half have a Masters degree or higher; one in five has an educational background in business.
  • Accounting, auditing, law, finance and fundraising are the most highly desired skills by non-profit boards. Experience in social work, technology and commercial services are also found to be currently lacking.
  • Compared to the boards of listed companies where an estimated 7.3% of directors are female, charities have a much higher percentage of female board members; over 40% have 25% or more female members.
  • Minority ethnic group representation on charity boards is low – only 12 out of 80 charity boards have directors from all four ethnic groups.
  • Based on available board tenure information from over 500 charities, the average tenure was 5.5 years; nearly 14% have been board members for more than 9 years.

Going forward, CNPL hopes that charities will make available their annual financial statements and annual reports on their websites, review the size of their boards and board composition regularly, and source for new board members externally to ensure the right mix of skills, competencies and diversity of perspectives.

With the social services sector expected to grow significantly in the next five years, CNPL is inviting more non-profit groups to use its services to develop leadership and place, volunteers, in executive director positions, as well as tap its pool of board volunteers.

“CNPL can help charities to be more effective by working with board members, executive directors and senior leaders to strengthen charities and develop their talent,” Mr Yoon added.

Commissioned by CNPL and sponsored by Credit Suisse, this first survey of non-profit practices in disclosure and governance is aimed at:

  • Measuring the non-profit sector’s current level of public disclosure on governance;
  • Identifying key attributes of individuals serving on non-profit boards, and
  • Studying the structure, practices and desired skillsets of non-profit boards

Honours students from NUS Business School under the supervision of Associate Professor Mak Yuen Teen conducted the survey, which targeted Institutions of Public Character and the larger charitable groups in the arts and heritage, community, education, health, religious, sports, social and welfare fields.