12 May 2008

1. Strengthening Governance in NPOs Board’s Challenges Presented byMr. Kaka Singh, Chairman and Partner 12 May 2008

2. Focus Areas Objectives of the Code • Enhance effectiveness of charities • Promote best practices • Enhance public confidence Strategic Mgmt Operational Mgmt Financial Mgmt NPO Framework in Singapore Code of Governance (COG) - to restore trust & help grow the sector -

3. Board’s Challenges BOARD’S OBJECTIVES  To grow the non-profit organisation  To attract more high calibre people to the Board PRACTICAL CHALLENGES • Punitive view of the COG - a “stick” towards NPOs? • Difficulty in cascading Board directions to operations • Cost issue – Can smaller NPOs afford fancy system like the larger NPOs ? • Talent issue – ability to find the appropriate human resources to effectively run the systems

4. Board’s Challenges:The Code – a ‘Stick’ or an ‘Aid’? • Concern : COG adds to the work load and burden on the small resource pool of NPOs • True to a certain extent, especially at the start, so it is a question of cutting the clothes according to the size of the cloth • COG is a good starting point and it does not take a lot to comply • Key is in channeling resources to focus on the required matter at hand rather than a broad based approach • COG lowers compliance cost in the long run • E.g. provides a risk-based reference to external auditors on NPOs

5. Board’s Challenges:Cascading the Board’s Directions • Board’s directions often time remain as ‘wish list’ • Boils down to execution problems – major stumbling blocks include • Square peg, round holes : difficulties in adapting guidelines as most view operations as unique • Wholesale adaptation makes manual non-operational • The perennial cost and talent issue • Guidelines are meant especially for smaller NPOs which may have difficulties coming up with own corporate governance framework • Board show of support in operating team is key • Open 2-way communication plays an important part • Finding the ‘right size’ professional help

6. Board’s Challenges:Affordability Issue • Smaller NPOs think that they cannot afford a COG compliant system • Question is : can we afford not to have one? • Opportunity cost can be much higher in sponsorship opportunity loss and competition for the talent pool • Start small, when it is still manageable • Invest on a practical system, no need for a “white-elephant”

7. Board’s Challenges:Talent Issue • Realistically – the most critical • Difficult to attract talent due to steep competition • Step 1 - Board members play key role in bringing in high calibre volunteers • Leveraging on corporate initiatives in CSR – Corporate Social Responsibility • It’s a chicken and egg matter – put the house in order, get the right results, resources will come (from marketing angle - corporate sponsors like to be with winners ) • Moving towards commercial remuneration structure is long term solution to talent management issue

8. Conclusion BOARD’S OBJECTIVES  To grow the non-profit organisation  To attract more high calibre people to the Board MEETING THE CHALLENGE - step by step - • NPOs cannot afford not to level up • First things first – leverage on public aid/help provided • Board members must work a little hard at the start – the fruits will come • Partnership with commercial companies is key to sustenance and growth but – NPOs must position themselves : everyone loves a winner!

9. THE END Thank You