Over half (50.9 percent) of Charities and Institutions of a Public Character (IPCs) in Singapore surveyed do not have a formally defined policy or approach to managing risk, or are unsure if such a policy exists.
This is one of the key findings in a recent survey done jointly by the Charity Council, KPMG in Singapore, and the National University of Singapore (NUS) Business School. The survey report, Influencing Risk and Risk Culture, categorises these charities under the ‘emergent’ stage when it comes to attitudes towards risk management. To guide charities on their journey towards more robust risk management, the Charity Council, KPMG and NUS Business School are launching a new toolkit today, and developing new training workshops to support the sector.
Survey findings uncover risk management challenges faced by charities
The survey also uncovered three most prevalent risk management challenges faced by charities – the lack of experience or expertise in risk management (79.3 percent); human resources to carry out risk management activities (70.3 percent); and financial resources to implement risk management practices (59.0 percent).
While the survey findings reflect the nascent adoption of formalised risk management practices, charities have demonstrated strong interest on the topic of risk management. “Understanding the benefits of risk management is an essential element for any organisation aiming to promote a strong risk culture. It directly affects the manner in which individuals approach decision making,” said Irving Low, Head of Risk Consulting, KPMG in Singapore. Charities have also voiced a zero tolerance on fraud risk in particular, including mismanagement of a charity’s funds and resources.
Recognising that risk management practices are still in their infancy in the sector, Susan See Tho, Senior Lecturer, Department of Accounting, NUS Business School said, “The survey findings revealed that charities place financial matters as one of their highest priorities, as opposed to risk governance and information technology risk. Hence, more has to be done by charities to set the tone and inculcate a stronger risk governance culture throughout all levels of staff and management. Education will play a vital role in enabling Charity sector employees to better understand the benefits of risk management, so that they are motivated and empowered in making it a priority in their day-to-day work.”
Conducted last September, the research was led by Principal Investigator, Professor Ho Yew Kee; Adjunct Associate Professor Richard Tan and Ms. See Tho, Department of Accounting, NUS Business School; as well as teams from KPMG and the Charity Council.
Toolkit and training programmes to support the sector
An Enterprise Risk Management Toolkit was also developed to guide charities and IPCs on their journey towards better risk management. Launched today, the toolkit provides a framework for risk management that is scalable to suit each charity’s needs, and shares practical insights and best practices. The report and toolkit will be made available online for free.
“We hope that the toolkit will support charities in their risk management efforts, and enable charities of all sizes and across sectors, especially those with limited resources,” said Mr. Low.
In addition to the toolkit, training programmes and workshops will be available to support charities’ adoption of the recommendations in the toolkit. Through training, education and awareness-building, charities will be able to progressively cultivate a risk management culture. Charities can tap on the VWOs-Charities Capability Fund (VCF), which provides grants for training and consultancy needs.
Culture and Values are Key in Risk Management
At the launch of the report and toolkit, Gerard Ee, Chairman, Charity Council said, “Good risk management is about driving the right values and culture throughout the organisation. In addition, charities need to build the capability to identify, understand and manage risks. It is part and parcel of good stewardship, and serves to protect the interest of the beneficiaries, employees and volunteers.”
