Forging the new governance

I sometimes wonder whether housing associations, if they were not required to, would carry out board appraisals, skills audits, compliance against a code of governance, as often as they must now. Yet this is precisely the time boards should be satisfying themselves that they are operating in the best interests of the business and not just to satisfy the regulator, important though that is. The current climate of welfare reform, perceived merger mania, issues around the provision of care and support, impact on finances of the living wage, Brexit and house prices etc., should encourage associations’ boards to think about how they can ensure the organisation meets the challenges ahead.

Structural review

There is a definite move in the sector for simplification of structures so that the board has a firmer grip on all aspects of the business and their scarce resource and that of the executive is not spread thinly over many entities. There are some key questions you can ask your board (see below: What to ask your board). The purpose and role of sub-committees is an important area that can be overlooked. They should be reviewed on a regular basis and the board should be asking what value subcommittees bring to the main board. Would some of the issues traditionally discussed in committees in detail be better placed at the main board? Is there sufficient space at board meetings to have the big discussions needed and to allow board members to ask the right questions and feel confident they understand the answers? A heavy board agenda can inhibit this. Meetings which allow discussions to drift and go into the operational can eat up time and frustrate others.

And are you confident that the board is populated with the right skills and competencies it needs to run a modern and ever-changing business, both now and in the future? It can be uncomfortable but a board really needs to rigorously assess what skills and behaviours it has and decide whether all board members are contributing at the strategic level non- executives should. There is just no room for passengers in today’s climate. However well-meaning people may be, they have to add real value. Boards must be able to step back and see the big picture. Compliance with a code of governance is vital but codes only set a baseline for governance. What are they actually trying to achieve? How can you go beyond what they require so the board is confident it is achieving excellence?

Make time

Boards need to set aside some time during the year to have these discussions to satisfy themselves that they are on top of the business and have future-proofed it as best as they can. Even in the formal board meeting schedule there could be an opportunity to rejig the agenda to allow for, say, an hour of strategic discussion on one or two issues or some time to have the discussion around the code of governance or the regulatory requirements. This is not rocket science but with the pressures on board members, all of whom are giving up their time, it can rarely happen. Now is the time to look at how you can re-fashion your governance approach to ensure the continued success of your organisation.

What to ask your board

  • How often do you review your governance structure?<
  • Is your organisation made up of several subsidiaries sitting under a group board and does your board have a clear ‘line of sight’ to all areas of the business?
  • Are some risky areas of the business only seemingly accountable to another subsidiary or sub-committee?
  • What assurance does the board have that it really knows what is going on?
  • How many sub-committees do you have?

This article also appears in February’s edition of the CT Brief, our governance special.

Stephen Bull is a Senior Consultant at Campbell Tickell. For more information or to discuss this article, please contact: stephen@campbelltickell.com