Corporate Governance
HCSA Community Services (HCSA) was established on 12 March 1997 governed by its Constitution as a society. Its Constitution complies with the requirements of the Societies Act and is set up under its Sector Administrator, the Ministry of Family and Social Development (MSF). HCSA is also a Charity and Institute of a Public Character (IPC), registered under the Charities Act, Chapter 37. HCSA complies with the guidelines for Basic, Intermediate and Enhanced tiers of the Code of Governance issued by the Charity Council. HCSA’s Governance Evaluation Checklist for the period of 1 Jan 2022 to 31 Dec 2022 can be viewed via the Charity Portal at www.charities.gov.sg.
Roles and Responsibilities of Board of Directors
The Board acts in the best interests of HCSA to fulfil its mission of empowering the vulnerable to find purpose for a more abundant life. It also ensures there are adequate resources for the operations and programmes of HCSA and that such resources are effectively and efficiently managed; that there are processes in place to ensure HCSA complies with all applicable laws, rules and regulations, and there is an appropriate code of conduct, which upholds the core values of HCSA and processes to ensure compliance with the code.
Day-to-day management of HCSA is delegated by the Board to the management team headed by the Chief Executive Officer (CEO) who was a board member until May 2022. Initiation of new programmes and activities, changes in current programmes and significant transactions require the approval of the Board/Management Committee. The Board also reviews and approves the annual budget prepared by the management.
Composition of our Board of Directors
The Board strives to ensure that board members, as a group, have core competencies in areas such as law, finance, management, strategic planning, human resource, technology and that it incorporates a degree of diversity. All Board members, except the CEO, are independent. Independence refers to not having any family, employment, business and other relationship with HCSA, any related companies or their officers that could interfere or be reasonably perceived to interfere, with the exercise of the Board member’s independent judgment made in the best interests of HCSA.
From January to May 2022 when the CEO was a member of the board, she did not participate in discussions or decision-making if there is any conflict of interest. The CEO does not determine her own remuneration. The President of the Board is not a staff of HCSA.
The Board comprises members from diverse backgrounds with expertise in various industries and professions. The average length of service on the Board is seven years.
Given that the Board is small with only one or two members contributing to a specific expertise, HCSA has retained three members who have served more than ten consecutive years.
Given than almost half the Board has served for five years or less, these board members continue to serve while developing a viable succession plan for the Board through leadership transition and to ensure the necessary skill sets are represented on the Board.
HCSA sets a maximum limit of four consecutive years for the Treasurer. As at end of the financial year, the Board had ten members.
HCSA has sub-committees with documented terms of reference. These committees provide oversight in the following areas – Finance, Investment, Audit & Risk, Human Resource, Property & Development, Volunteer & Philanthropy, Nomination, Highpoint, Dayspring Programmes, and Academic Board. The sub-committees report to the Board regularly. The Board meets regularly and there were six Board meetings in 2022.
Board Selection, Recruitment, Training, and Evaluation
The Nomination Committee regularly reviews the structure, size, and composition (including the skills, knowledge, and experience) of the BOD and makes recommendations to the BOD regarding any changes.
Board members may propose members to the board where nominees possess relevant and critical skillsets that would serve the organisation.
When new members are nominated, they would go through a process of observation, interviews, and application, after which the Nomination Committee would make a recommendation based on which the board would vote to accept the new member.
New board members undergo an orientation programme and would be encouraged to attend relevant external training programmes particularly relevant to non-profit boards.
Board members are also regularly informed of relevant training courses.
The Board underwent an evaluation exercise in 2020, based on which a few areas of follow-up and development were identified, and action plans developed. The Board also participated in Board Leadership Development Project in 2022 where the Board went through three training workshops on identified focus areas.
Terms of references (TOR) for board committees
1. Finance
The main purpose of the Finance Committee (FC) is to assist the Board in its oversight responsibilities relating to fiscal management. In furtherance thereof, the FC will review and recommend approval of an annual operating and capital budget, regular review financial results, ensure the maintenance of an appropriate reserve, and oversee the management of organisation financial assets. The FC will also ensure that management employs personnel and systems capable of providing timely and accurate financial information to key decision makers.
The FC’s functions, duties and responsibilities include but are not limited to: to monitor revenue and expenditures as compared to the budget, to review the draft annual budget prepared by the management and recommend its approval to the Board, to review the annual financial statements and recommend its approval to the Board, to monitor and report to the Board HCSA’s financial status and its compliance with financial policies and governing regulatory requirements, to review accounting and financial management procedures periodically and to review the TOR of the Finance Committee and recommend appropriate changes to the Board.
2. Investment
The Investment Committee’s (IC) role is one of strategic direction and oversight of HCSA’s investment assets. The investment portfolio represents an important asset of HCSA’s. The Committee fulfils a role in the long-term stewardship of these assets in order to best further the objectives of HCSA.
The IC’s functions, duties and responsibilities include but are not limited to: develop and maintain committee governance documents, assess investment strategy and risk, selection of investment advisors, and monitor and evaluate investment performance, service, and cost.
3. Audit & Risk
The main purpose of the Audit & Risk Committee (ARC) is to provide independent oversight into HCSA’s accounting and financial reporting and oversee the annual audits (both external and internal). The ARC will also oversee the following broad areas of work: corporate governance, ethics, adequacy of internal controls, proper authorisation of activities and expenditures and protection of employees raising concerns about serious accounting or auditing irregularities (whistle-blowing).
The ARC’s functions, duties and responsibilities include but are not limited to: manage risk and control, oversee financial reporting, publication of monthly management reports and other published financial information, as well as the regulatory, compliance and ethical matters, and assess and recommend the appointment of external auditors.
4. Human Resource
The main purpose of the Human Resource Committee (HRC) is to provide oversight into HCSA’s human capital management strategies and policies, and to provide guidance to the Management on staff management matters.
The HRC’s functions, duties and responsibilities include but are not limited to: develop human resources strategy and implementation plans, review and develop HR policies and implementation plans, coach and guide the Management in implementing HR practices and policies, propose the annual increment and performance bonus quantum to the Board for approval, review and evaluate major HR projects, appoint members to the sub-committee as may be necessary, and to regularly update the Board on relevant internal or external HR developments.
5. Property & Development
The main purpose of the Property, Development and Maintenance Committee (PDMC) is to review, plan and develop a master plan for No. 1, Lorong 23 Geylang and present the plan to the relevant government authorities to secure a longer lease. The PDMC will also regularly assess and recommend actions to ensure the proper maintenance and upkeep of the abovementioned compound.
The PDMC’s functions, duties and responsibilities include but are not limited to: review and recommend an optimum and right tenant mix, plan for proper land and space usage, recommend appropriate business models for the proposed developments, and determine the short, intermediate, and long-term objectives of the Master Plan and their deliverables.
6. Volunteer & Philanthropy (HVPC)
The HCSA Volunteer & Philanthropic Committee (HVPC) is responsible for overseeing HCSA’s overall fundraising and, in particular, the strategic fundraising done by the Board, staff and volunteers.
The HVPC’s functions, duties and responsibilities include but are not limited to: working with the CEO and Partnerships & Strategic Communications team to establish a fundraising plan, to support outreach and advocacy to specific donor segments, to take the lead in certain types of outreach efforts where appropriate, to involve the Board in fundraising, and to monitor fundraising efforts to ensure that ethical practices are in place, that donors are acknowledged appropriately, and that fundraising efforts are cost-effective.
7. Nomination
The main purpose of the Nomination Committee (NC) is to lead the process for board appointments and make recommendations to the Board and assist the Board in fulfilling its corporate governance responsibilities regarding all matters related to the appointment and termination of the Board, their performance evaluation, training, etc.
The NC’s functions, duties and responsibilities include but are not limited to: assist the Board in fulfilling its corporate governance responsibilities within its terms of reference, identify and nominate candidates for the approval of the Board to fill board vacancies as and when they arise, establish, monitor and review the Board’s induction programme and orientation programme and on-going training, review and recommend to the Board the Board’s succession plan for the BOD and other senior executives, and undertake annual reviews in light of the current make-up of the Board.
8. Highpoint
The Highpoint Management Committee (HPMC) will provide overall direction as determined by the HCSA Board and oversee effective delivery of services by Highpoint to its beneficiaries taking into consideration the needs of the community it serves, so as to afford the best use of human resources, premises, assets, and finances.
The HPMC’s functions, duties and responsibilities include but are not limited to: corporate governance over Highpoint, review and support of financial and fundraising matters, regular review of Highpoint’s programmes to ensure effectiveness, support and oversight of staff matters including recognition and succession planning.
9. Dayspring Programmes
The Dayspring Management Committee (DSMC) will provide overall direction as determined by the HCSA Board and oversee effective delivery of services by Dayspring to its beneficiaries taking into consideration the needs of the community it serves, so as to afford the best use of human resources, premises, assets, and finances.
The DSMC’s functions, duties and responsibilities include but are not limited to: corporate governance over Dayspring, review and support of financial and fundraising matters, regular review of Dayspring’s programmes to ensure effectiveness, support and oversight of staff matters including recognition and succession planning.
10. Academic Board
The Academic Board (ACB) is the apex Academic committee of HCSA Academy responsible for formulating and approving the academic policies and procedures of the Academy. The Academic Board advises the management on matters pertaining to academic directions, curriculum, training, learning and assessment of the Academy courses.
The ACB functions, duties and responsibilities include but are not limited to: advise the management on academic policies and strategic directions, approve teaching, learning and assessment strategies, systems and tools, consider and approve the development of new courses, review and approve changes in existing courses, define and approve entry and graduation requirements for each course, consider and approve academic standards and the issuance of qualifications and graduation awards, facilitate HCSA Academy to implement and comply with the policies and procedures developed, and establish sub-committees necessary for the purposes of enabling the ACB to carry out its responsibilities.
Re-nomination and Re-appointment
The Nomination Committee facilitates the process of re-nomination and re-appointment, which includes seeking interest in serving on the Board, and facilitating a secret ballot for the nomination of appointment holders.
During the AGM, board members would declare their intent, and the names of board members who expressed an interest to serve as an appointment holder would be announced. The Board would then vote on the appointment of each office bearer.
Conflict of Interest
There are documented procedures for Board members and staff to declare actual or potential conflicts of interest. Board members and staff are expected to avoid actual and perceived conflicts of interest, where they have personal interest in business transactions or contracts that HCSA may enter into or have vested interest in other organisations that HCSA has dealings with. They are expected to declare such interests as soon as possible, abstain from decision-making and not vote or participate in matters where they have a conflict of interest.
Strategic Planning
The Board reviews and approves the vision and mission of HCSA. They are documented and communicated to its members and the public. Strategic planning meetings are conducted every year to review the strategic plan for HCSA to ensure that the programmes and activities are in line with its objectives.
Human Resource Management
The Board approves the documented human resource policy of HCSA and exercises policy oversight of the human resource matters in HCSA and ensure that there are systems for regular supervision, appraisal, professional development of staff and also procedures to address grievances and resolve conflicts.
Risk Management Practices
HCSA has imbued a culture of risk management being everyone’s responsibility and this is built into our processes. Starting with good governance, we established distinct roles of responsibilities and accountability with clear measurable outcomes. This allows good risk-management processes to be put in place. Such processes include personal data protection processes across the organisation and reliable business continuity plans that allows us to mitigate risks.
Reserve Policy
HCSA has a Reserve Policy that provides clarity in the management of our reserves. The reserve is an unrestricted fund balance set aside for unexpected events, loss of funding or income and large unbudgeted expenses. The policy applies to that part of HCSA’s income funds that are freely available for its operating purposes. It excludes endowment, restricted and designated funds. This policy serves to assure stakeholders that the reserves is well-managed and HCSA has a strategy for building up reserves of up to one year, that is, the unrestricted funds that are freely available for operating expenses, in order to ensure long-term sustainability.
Financial Management and Controls
The Board ensures that adequate internal controls for financial matters are in place and reviews its financial policies, procedures, processes, key programmes and events to ensure that there are adequate resources for the operations and programmes of HCSA and that such resources are effectively and efficiently managed.
The Finance Committee reviews the Financial Policies and Procedures of HCSA and makes recommendations to the Board for its approval. It also reviews HCSA’s financial performance and annual budget of operating and capital expenditure for the Board’s approval. The Committee ensures that HCSA is in compliance with requirement in Financial Reporting Standards (FRS), the Recommended Accounting Practices for Charities (RAP6) and the Code of Governance for Charities and Institution of a Public Character (IPC).
The Finance Committee’s primary function is to assist the Board in fulfilling oversight and fiduciary responsibilities to act in the interest of HCSA’s donors and stakeholders. The Committee reviews the efficiency and effectiveness of HCSA’s material internal controls, including operational and compliance control, risk management and adherence evaluation, ascertaining the adequacy of HCSA’s corporate governance, policy and procedures and the extent of adherence thereto.
HCSA has a Whistleblowing Policy that provide employees with accessible channels for reporting suspected fraud, dishonest practices or other similar matters.
Fundraising Practices
HCSA has in place processes and practices to ensure that all fundraising activities are honest, ethical and uphold the public’s confidence in fundraising and charities. The Board ensures that all materials used for fundraising contain relevant and accurate information and do not contain any misrepresentation or material omission. HCSA ensures that funds and donations are used in accordance with donors’ intentions and the specific purpose as communicated when soliciting for donations. Processes are in place to ensure that donors’ confidentiality is respected. Any information or records of donors are kept strictly confidential at all times.
Volunteer Management System
HCSA has developed the Volunteer Management System (VMS) to support volunteers through their volunteer journey and help them effectively contribute to the objective of HCSA. The chart below illustrates this system.
Disclosure and Transparency
HCSA makes available to its stakeholders an annual report that includes information on its programmes, activities, audited financial statements, Board members and executive management.
Except for the CEO who was on the Board from January to May 2022 during which she received remuneration as an executive staff, all Board members serve on a voluntary basis. No staff is involved in setting his or her own remuneration. The Board reviews and approves employee compensation and benefit packages, including the performance bonus recommended by the management.
HCSA discloses in its annual report the three highest paid staff in bands.
There is no paid staff who are close members of the family of the CEO or board members who receives more than $50,000 during the year.
Public Image
HCSA is committed to lawful and ethical behavior in all its activities and requires that Board members and employees conduct themselves in a manner that complies with all applicable laws, regulations and internal policies, upholds the core values of HCSA and accurately portrays its image to HCSA’s stakeholders, donors and the public.
Personal Data Protection Act
In compliance with the Personal Data Protection Act 2012, HCSA will not share any personal details with a third party without one’s consent, and all personal data is kept strictly confidential.
Governance Evaluation Checklists
1 Staff: Paid or unpaid individuals who are involved in the day-to-day operations of the charity, e.g. an Executive Director or Administrative personnel.
2 Volunteer: Persons who willingly give up time for charitable purposes, without expectation of any remuneration. For volunteers who are involved in the day-to-day operations of the charity, they should also abide by the best practices set out in the Code applicable to ‘staff’.
3 Close members of the family: Those family members who may be expected to influence, or be influenced by, that person in their dealings with the charity. In most cases, they would include:
• That person’s children and spouse;
• Children of that person’s spouse; and
• Dependants of that person or that person’s spouse.
