The 'governance' of an organisation generally refers to the processes by which an organisation is directed, controlled and held to account. It covers issues of authority, accountability, stewardship, leadership, direction and control exercised in the organisation.
Good governance practices are crucial to the organisation's ability to function, to achieve its objects and to comply with all of the legal, ethical and operational requirements of a non-profit organisation. A major issue that non-profit organisations often face is working out:
- the role and responsibility of an organisation's board or committee (to govern the organisation) and
- the role and responsibility of the management or executive team (to manage the organisation).
Keep in mind that your non-profit organisation would be subjected to different laws depending on its legal structure. For example, if your non-profit organisation is registered as a charity you will be governed by legislation such as the Charities Act and other relevant laws depending on what the legal structure your organisation adopts (e.g. Companies Act for a Company Limited by Guarantee).
In addition charities are also guided by non-mandatory regulations like the Code of Governance. These provide guidance on the key principles of governance best practices. While there are no sanctions arising from non-compliance, a charity must be able to explain why it is unable to comply and to indicate what steps it intends to take to move towards compliance or provide explanations if it decides not to take steps to comply with the Code. For IPCs , the extent of compliance or explanations for non-compliance will be taken into consideration when they apply for renewal of their IPC status.
Since the board and staff will be complying with the law and in some cases be responsible for making sure that the organisation complies with the law, it is important for them to understand Singapore laws regarding non-profit organisations. The links below may be useful sources of information.
Code of Governance