The date 6 April 2017 will be auspicious for housing association governance.
This is the day that boards are given their freedom to make their own decisions.
The deregulatory measures on disposals, restructures, mergers and acquisitions come into force. And no longer will associations need to seek the regulator’s approval on such matters.
This is good news for governance. However, it brings with it an extra burden of expectation and responsibility that should not be underestimated.
The regulator will take a keen interest to ensure that decisions “protect social housing from undue risk” and that they demonstrate “accountability to tenants” and “proper consultation with tenants” on any disposal that changes the landlord or has implications for a tenant’s statutory or contractual rights.
A notification regime will be introduced, requiring an association to let the regulator know when a disposal or a restructure of an organisation has taken place.
And there is a prior event notification that is required “BEFORE” – as the guidance spells out in capitals – a new entity is registered with Companies House or the Financial Conduct Authority.
The process for notification is to be systematised through standard reporting mechanisms, unless you are small, in which case, it is likely to be event by event. If you have good systems in place, it is business as usual. If you don’t, it will feel very different.
Beyond receiving the notification, the regulator will test the quality of decisions and decision-making through the in-depth assessment process, which it is anticipated will have a beefed up value-for-money element to it.
The extra burden for associations comes with the need not just to think about one’s own association but also about the wider sector, when making individual decisions.
The regulator continues to have responsibility for the overall reputation of the sector, but with boards making their own decisions on matters that may have reputational significance, this is a responsibility that in essence is now shared.
Good decisions, that benefit current and future residents, our leaseholders and owner-occupiers, for whom we may provide homes, will enhance the sector’s reputation.
Decisions that are poor will not only affect one association but will have a wider impact on the many.
It is therefore important for the sector’s long-term future and reputation that we use our new freedoms wisely and well.