Town Councils (TCs) were formed in 1989 to give elected Members of Parliament (MPs) the autonomy and latitude to run their own Towns, in partnership with the residents. The main functions of a TC are to control, manage, maintain and improve the common property of the HDB residential and commercial properties within its Town for the benefit of residents. A TC is led by a Council that is made up of elected MPs and appointed members. At least two-thirds of the appointed members must be residents of the HDB housing estates within the Town, to ensure that residents’ views are sufficiently represented within the Council.
2. At the passing of the Town Councils (Amendment) Bill in March 2017, MND had shared that it would be working with the TCs to develop a Code of Governance (“Code”) for TCs. The Code would complement the existing legislative framework by setting out principles of good governance and highlight best practices that can guide the TCs in better executing their fiduciary responsibilities and improving accountability.
3. The Code is based on five guiding principles, namely:
a) Integrity – The Town Council acts with integrity in its decision making and execution of its duties, in the best interest of the residents.
b) Objectivity – The Town Council exercises objective judgment that represents the interests of the residents.
c) Accountability – The Town Council is accountable to the residents for the way it executes its mandated duties. The Town Council fulfils its responsibilities to enable the effective running of the Town Council in the best interest of the residents.
d) Fairness – The Town Council is fair and impartial in its interactions with the residents.
e) Transparency – The Town Council maintains open communication with the residents, in its conduct and execution of Town Council activities.
4. These guiding principles underpin the provisions in the Code, which span four domains: (a) Council Effectiveness, (b) Internal Controls & Processes, (c) Financial Management and (d) Vendor Management. Each domain has an overarching general principle, and is further divided into sub-domains. The Code provisions set out best practices which TCs are encouraged to adopt, through a comply-or-explain regime.
5. In drafting the Code, MND has taken reference from the Code of Charities and Institutions of Public Character and the Code of Corporate Governance where appropriate. As TCs manage large sums of public monies, TCs are similar to Charities and public sector entities, where there is public expectation for transparency and accountability in the conduct of their activities. On the other hand, TCs undertake relatively complex procurement and operational activities similar to commercial companies. In addition, the Council of a TC performs a governance role akin to that of the Board of Charities and the Board of Directors in a company. However, the appointed members of the Council i.e. the Town Councillors are volunteers who may only receive an allowance for their services, as opposed to a company where Board members may be remunerated for their services. Given these considerations, MND has adapted the provisions accordingly to suit the operating context of TCs.
The key provisions in the Code are summarised in the table below. Please refer to the Annex
for the full draft Code.
7. Members of the public can submit their comments and suggestions on the draft Code by 30 April 2019, via the following channels:
• Fax to: 6325 7254
• Post to: Ministry of National Development
5 Maxwell Road #21-00
Tower Block MND Complex
Subject: Draft Code of Governance for Town Councils
8. We regret that we will not be able to individually acknowledge or address every comment or suggestion that we receive. We will not disclose the identity of person(s) providing the feedback, to maintain the confidentiality of feedback received.