Stress testing, business continuity and scenario planning are high on the agenda for governance teams as the threat of coronavirus looms, and registered providers are responding to the outbreak by cancelling meetings, enabling as much remote work as possible, and establishing clear reporting lines and dedicated virus leads.
It is easy to become absorbed by the immediate challenges, so we’ve asked what else should be top of your list to be thinking about going into 2020/21. Here are ten suggestions to keep on your governance radar.
- The big story for the next ten years will be the de-carbonisation agenda. Whilst the most immediate and visible impact on organisations will come in the realms of development and asset management’s retro-fitting programme, the implications for governance are no less profound. New development costs more, asset investment increases and, unless significant funding comes from government, huge stress is placed upon margins and covenants. Boards will be looking closely at their skills profiles and management of risks associated with implementing new and emerging technologies against the clock.
- Is there any issue within the sector to which a response of more supply is not a very good first answer? Despite the challenges of funding, government investment, de-carbonisation, and asset investment, boards are still going to have to manage the drive to increase supply whilst managing the associated risks and costs.
- Having said that, the quality of those homes has never been more important and higher on the agenda than since the early days of social housing. It has been a chastening experience to understand that our homes have to be safe first and foremost, and bringing the lessons learnt into the future operations of boards in their scrutiny and oversight roles will undoubtedly be a key feature of governance practice to come.
- For almost everything we do, we can do it better, faster or cheaper if we work in partnership with other organisations. Certainly, our approach to developing new approaches to governance is to encompass some neglected corners. Whilst the sector has over £1 billion invested in joint ventures, we have found it unusual for the governance of such arrangements to fall within the scope of a standard governance review.
- As the NHF is consulting on a new code of governance for the sector, we might be minded to state that, simply, diverse boards are better boards. The evidence for the assertion is so overwhelming that it would seem to be logical that if your board doesn’t reflect the diversity it should, then the new code should have the ‘comply or explain’ principle engaged. The Leadership 2025 initiative that we have been active participants in has been so successful and well-received that it might be useful to see something like it reflected in the governance space?
- Culture, and board-room behaviours are increasingly important in understanding excellence in governance. This has been reflected in the latest versions of the Corporate Code, the Charity Code and the Welsh Code and we would expect to see enhanced reference to the subject in the new NHF Code due later this year. How boards understand their own culture and take active steps to manage it will be one of the interesting areas to watch.
- How will one of the main areas of the Green Paper: engagement and accountability, evolve? It is close to the heart of the sector and few would argue against the principles, but the application of them may become the subject of debate. We look forward to contributing to discussions at board on what accountability looks like from the tenants’ perspective.
- The increasingly assertive tone of the regulator to try and ensure that associations don’t wait to be told to do the right thing is noteworthy. The policy vacuum is as a consequence rather than a cause of uncertainty, but nonetheless, as a sector, we know what we’re about and, typically we know how to do it well; so let’s do just that.
- Value for money continues to be prominent. A memorable phrase from last year (in the context of IDAs) was: “to hear a good story, well told”. Working with organisations on VfM, we’ve found there is always a good story to be told but, on occasion, telling it well has been a challenge. We look forward to the dialogue at board about what tenants would like to see on VfM, rather than the regulator.
- Last is something so fundamental that it impacts all the above: data. It is the lifeblood of digitally engaged organisations but too often assumed that it is always correct, complete and consistent. And it is not only GDPR at stake. Knowing how many serviceable gas appliances and where they are is important too, and the use of (accurate) predictive analytics to engender some wisdom into the billions that will be spent on new development and asset management programmes will move well past the ‘nice to have’ phase. Which brings us back to the skills question – who on your board would look to be your champion for data governance?
May you live in interesting times…