In today’s operating environment housing providers are facing increasing challenges and constraints. With business plans under growing pressure and regulatory expectations mounting, it is now more crucial than ever that boards feel sufficiently assured that they can manage the risks that threaten the successful achievement of their strategic objectives. But how do they know with confidence that their organisation complies with the regulatory standards, or that financial performance and viability is as good as it should be? This all comes down to the robustness of their assurance framework.
Boards typically seek assurance on regulatory compliance, risk and broader performance from a myriad of sources, including their executive teams, external advisors, as well as internal and external audit. Each of these areas have different strengths and weaknesses which is why understanding the nature of these sources is critical to ensuring that an assurance framework is demonstrably effective.
For regulatory compliance, ensuring a framework is fit for purpose comes at a time when boards are now expected to certify compliance with the governance and financial viability standard even thoughobjective measurement is likely to be difficult. Meanwhile, the regulator is becoming increasingly concerned with data integrity – in recent months multiple databases which don’t reconcile have become a common source of gas servicing slip-ups. Yet, as organisations become more complex, arguably boards may only work effectively at a strategic level. The difficulty therefore lies in striking the balance between boards achieving genuine assurance in core reporting without members getting over involved in the scrutiny of operational detail.
We have often found that compliance is often reported in isolation from other performance measures, which means it can take copious amounts of time and energy to get to the crux of any issue. To counter this, we have begun to implement an approach with our clients that offers appropriate challenge to organisations and supports their ability to provide timely and reliable information.
Our solution lies in harnessing the visual impact of balanced scorecards (which are now extensively used by housing organisations) to incorporate a regulatory compliance dimension to improve internal and external communications. Used correctly, we think the scorecard approach addresses a serious deficiency in traditional compliance reporting and assurance; by creating a joined up approach and overall view of performance, lines of accountability can be strengthened so unnecessary duplication is avoided at the top level.
Key to getting the balance right is therefore about having efficient and effective tools at hand that are underpinned by a framework which is structured to provide continuous and auditable assurance. In these uncertain time working at a strategic level but with the right assurance on operational detail is even more important for boards.
To find out more about Altair’s balanced scorecard, please contact Fiona Underwood on 07788 643 092 |
firstname.lastname@example.org, Mark Sweeny on 07887 512165 | email@example.com or Lucy Worrall on 07880 327 205 | firstname.lastname@example.org.